Nuclear Niche

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Some vendors, wary of the storm clouds over the future of nuclear power, are canceling product lines and advising utilities to order parts now while they are still available. As a result, RCS serves as a shelf for parts that won't be used for another decade, if ever.

Like the rest of their beleaguered counterparts, the utilities storing at RCS are plagued by chronic cost overruns. Both Grand Gulf units, the initia clients, were expected to cost $13 billion and take 10 years to build; instead, it has taken 10 years and about $3 billion just to build Unit 1, which is nearly complete. Unit 2 is about 20% complete. But for RCS, prolonged construction means prolonged patronage. In addition, Brown expects to supply all four units with storage and maintenance for spare parts for the duration of their commercial lives, an average of 30 years.

Most of RCS's non-nuclear business comes from foundering, or sunset, industries. The second largest commodity stored -- occupying about 100,000 square feet -- is paper products, largely from International Paper Co., located down the road from RCS. About 20,000 square feet are taken up by specialty steel, with the remainder housing heavy machinery. "Sometimes, a recession can feed a warehouse business," says Brown, "because slack demand creates large inventories and backlogs." Most of the commercial warehousing industry, though, has been dampened by the recent recession, with current activity down 13% from 1980.

Roughly 90% of RCS's business is done by long-term contract. Brown refuses to divulge rates, but he concedes that his prices are higher than average. The key distinctions, he maintains, are specialized service, efficiency, and convenience. "We can do it cheaper than the utilities can do it for themselves," he says. "They have to build and care for their own storage sheds. We're consolidated and quicker. The rates are higher, but often the overall bill ends up being lower." He adds that utilities, caught in a surreal world of billion-dollar overruns, usually place RCS's charges under "miscellaneous."

Despite the complex nature of some reactor components stored at RCS, the work required of Brown's employees is surprisingly conventional. There are no white-coated technocrats with clipboards, experience in material handling is the primary qualification. As Brown puts it, "It doesn't take a whole lot of expertise to turn a valve. It may be nuclear, but a nut's a nut and a bolt's a bolt." Preventive maintenance is not an unusual service for warehouses, but few undertake the meticulous testing and care that have grown into an expertise at RCS. For instance, the RCS crew is regularly suited with rain gear and sent crawling into giant reactor bearings to spray the interiors with a mist of special rust inhibitors. Pressure readings of reactor heat exchangers are monitored to comply with vendor specifications, and nitrogen is injected into equipment parts to retain pressure equilibrium.

According to Brown, his most indispensible employee is his first cousin Allen Brown, RCS vice-president and general manager. "I rely on Allen to stay on top of the day-to-day details at the warehouse," says Brown. "That frees me to focus on sales and the financial aspects of the company, the things I do best."

Allen was the first person Larry enlisted when given the opportunity to store for Bechtel. A former public relations man, Allen played on the first two Green Bay Packer Super Bowl teams under coach Vince Lombardi Lombardi's competitive philosophy still has a hold on Allen. "I work my men pretty hard," says Allen, "but I work myself pretty hard, too."

Hard-working employees providing specialized services will mean another prosperous year for RCS. But, although his business is ostensibly secure, Brown is like a shark -- cessation of movement is, for him, tantamount to death.Thus, he envisions a boldly expanded role for RCS as the foundation of a program for pooling spare parts for reactors. So far, he has sponsored two conferences for the top managers of about 10 utilities across the country to discuss the pooling plan. One was held last December in Natchez, the other last March in New Orleans. "The response was good, and now the ball is in their court," Brown says. "It was helpful to get together to discuss common problems and the need for a co-op spare-parts program. Utilities are too fragmented and don't communicate enough. They're preoccupied with overruns, rates, and government regulations."

Spare-parts pooling is not a new idea, and some vendors already stock limited inhouse inventories of parts for utilities to dip into. But, although vendors and utility consortiums have considered pooling, a comprehensive co-op system remains unrealized The only existing program that approaches the one Brown envisions is Pooled Inventory Management (PIM), being managed by GE for participating utilities. However, PIM is geared only for big-ticket items, and so far it has received much interest but scant business Utility executives who attended Brown's meetings are studying the feasibility of categorizing interchangeable parts, a first step toward the creation of his dream.

"I think Brown's idea could work," says Gary Weigand, vice-president of nuclear operations for Gulf States's River Bend project. Weigand attended both utility conferences, and he supports parts pooling. "Conceivably, pooling could save each utility $1 million a year per plant."

Larry Brown's warehouse on the banks of the Mississippi is booming, but his spare-parts pooling scheme, if successful, could boost business exponentially. He is confident that RCS, by virtue of its reputation and experience, would naturally inherit the lion's share of the market. Echoing George Mallory's reason for wanting to climb Mt. Everest, Brown explains: "I make deals like this because they are there."

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