Cathy Ackerman: Welcome to Sweet Tea and Strategy, a podcast by Ackerman Marketing and PR featuring business and community leaders throughout Tennessee talking about issues and trends of importance to our state and beyond. And sharing some of their very best sweet tea recipes and tea sipping stories. I’m Kathy Ackerman and I’m pleased to welcome Ken Rueter, President and CEO of UCOR in Oak Ridge, Tennessee. Project manager cleanup for the East Tennessee Technology Park, which we’ll define a little bit more in just a minute, Ken. But thanks very much for joining us today.
Ken Rueter: Well Kathy, thank you. I’m really glad to be here today.
Cathy Ackerman: Before we get started into more serious business, let’s talk about sweet tea! My guess is that you may not have grown up in the South, may not have spent all that much of your childhood in the South, but how do you feel about sweet tea?
Ken Rueter: Well, I have an interesting story with it. And you’re right on, I’m a Yankee. I grew up in the outskirts of Cleveland, Ohio and graduated from Cleveland State on this journey. But as life has it, it had brought me to the Southeastern United States to work and in that, met the love of my life, Ruth. And so, was married in the Southeast. She actually had a Northern background but spent many of her years in the Southeast and was pretty well rooted in there. So, very traditional Southern lady, and had friends that she built over the time with regard to that.
Ken Rueter: One of them, I became very close friends with her husband and so we had a kind of a nice couple’s relationship. As part of that, one of her big things in the summer is her sweet tea that she made. I guess I looked at it from a very different perspective because ultimately in my journey, I got a degree in engineering, and it actually was chemical engineering. And so maybe I had an eye for more of the science of things. So I would watch her make this sweet tea which, if you hadn’t grown up with it, it was a little bit sweet to you.
Cathy Ackerman: Lots of sugar!
Ken Rueter: Yeah! And I witnessed her one day making it—her name was Jojo—and what I watched her do was what an engineer would refer to as super-saturating the water with sugar. So she had a technique for getting the maximum amount of sugar dissolved in water that you could physically do with heating and things like that. And she had learned that traditionally through her mother, and she was from the Florida area. And then she would sun-brew the tea into the super-sugar saturated water.
Cathy Ackerman: The perfect sweet tea!
Ken Rueter: Yes! And then of course, had the whole aspect of how you iced it and all that. It took me a while because again, I maybe I knew too much. Again, many times camping and hanging out and doing a little boating, it becomes a favorite, so.
Cathy Ackerman: So have you replicated that recipe yourself?
Ken Rueter: No, I have not. I don’t think I’m worthy of doing it. I’ve watched Ruth do it a few times and, interestingly enough, our kids all grew up together and so all my children are grown up enough on their own, but they still talk about Jojo’s tea.
Cathy Ackerman: That’s wonderful. I’ll have to try it sometime, get Ruth to make it for me.
Ken Rueter: We will, we’ll have to get together.
Cathy Ackerman: Moving on to talk about the important work that you and your company have been managing for the past several years in Oak Ridge. Give us just a little bit of background on UCOR and on the massive task that you were faced with in cleaning up the huge gaseous diffusion plant. In other words, what is UCOR’s mission and what kind of scale are we talking about here with this project?
Ken Rueter: Yeah, I’ve got quite a bit of passion for this. I’ve spent probably the last 32 years in environmental cleanup of federal sites, and this is the largest undertaking that I’ve ever been involved with and actually it’s one of the largest and it’s referred to as Superfund—the Superfund Federal Act for cleanups in the United States.
Ken Rueter: And the undertaking essentially is delivering three end-states or outcomes associated with doing the environmental cleanup of what’s referred to as the East Tennessee Technology Park or—for those who have been in this region of the country for their whole lives and many generations—referred to as K-25.
Ken Rueter: And what that undertaking essentially is is that we ultimately have the responsibility to perform the necessary environmental cleanup actions to clean up the site to a point that it’s no longer considered a Superfund location, which then enables significant land-use opportunities, which is referred to as re-industrialization, for economic development in East Tennessee and the greater state of Tennessee for larger-scale businesses commonly referred to as Brownfield redevelopment.
Ken Rueter: And that’s really at the center of our mission. But really what bookends that mission because it fits appropriately with land use and land reuse is conservation, because not all land that’s cleaned up is appropriate or valuable from an economic development standpoint, it more leans itself towards conservation and civic and community reuse from that standpoint.
Ken Rueter: And then, by the nature of it being a federal site, it has a significant historic preservation component to it. In the case of this site—which I find personally very exciting—is that it will be the part of the 409th National Park of our country.
Cathy Ackerman: Very exciting.
Ken Rueter: No doubt. And it’s really added a lot of energy to our job. And so we have these three end-states that we have to deliver: historic preservation, environmental cleanup and economic redevelopment, and conservation reuse and availability.
Ken Rueter: The magnitude of it is significant. The cleanup has involved remediating the largest under-roof buildings that have ever been built in the history of the world—in excess of 6 million square feet. Multiple Malls of the Americas, if you’re familiar with that in the Minnesota, Minneapolis area. So it’s a very significant initiative that’s going to essentially result in 6 million square feet of building being cleaned up, roughly 1,500 acres of land remediated in return for Brownfield redevelopment, approximately 3,300 to 3,400 acres of land under a conservation use agreement with the state of Tennessee to benefit all of the citizens of Tennessee, and then approximately 70 acres dedicated to historic preservation which is a combination of the National Park site and a state historic center associated with the features of the K-25 facility or gaseous diffusion plant.
Cathy Ackerman: Huge undertaking! And your client, if you will, is the US Department of Energy.
Ken Rueter: Yes it is.
Cathy Ackerman: What were the top three challenges that you were faced with initially on this project?
Ken Rueter: Okay, so we were awarded this job in around the May of 2011 timeframe. And the three most significant things we were facing was: first of all, through the system the government has for measuring the performance of projects and major federal contracts, this project at that point in time—around the summer of 2011—was deemed a troubled project. And it had a number of significant performance, delivery, regulatory, and safety issues associated with it.
Cathy Ackerman: And the company was rewarded accordingly against those measures.
Ken Rueter: Yes, yes. So it’s a performance-based contract and we have measures in there that if we meet those, then that’s part of the fee that we’re provided for performing the work by the federal government. So that was the first challenge as we were coming into this need for a kind of a formal business turnaround, if you’ve been part of turnaround initiatives with regard to companies.
Ken Rueter: The second one is re-establishing confidence within the people who finance our work to do it. So that would be our Congress who appropriates the dollars for us to do our work. And when you have troubled jobs, you usually see appropriations or fundings trail down as a result of it because our Congress is responsible for being fiduciary with our taxpayer dollars. And so there was a really large focus with regard to how do we make sure that we not only deliver, but we do the necessary things to tell our story transparently and accurately so that we could turn around the perceptions and realities with regard to the job within those who finance our work. So that was a pretty big challenge. We actually branded ourselves as "Investment Worthy" and a commitment to demonstrate that and have carried that brand all the way through.
Ken Rueter: The third was standing up a multi-billion dollar company in East Tennessee and the mechanics of doing that and the need to do it with quite a sense of urgency. We’re usually allotted approximately 90 days to do a transition, that’s a pretty rapid startup. Most of the focus and most of our work revolves around people, both those that are represented or part of a union and those that are not, and ensuring that we’re doing the right thing with regard to being their employer and making that happen credibly.
Cathy Ackerman: And finding the right people, training the right people?
Ken Rueter: That too. We typically at that point in time we were about 1,250 in workforce size and we typically commit to bring somewhere between 70 and 100 people to the job from our parents, the people who own our joint venture, which we have two owners. And finding them and bringing them to fulfill these "change agent" roles because we’re back to issue one: we’ve got to institute change and turnaround.
Cathy Ackerman: Is that hard to do, to find that workforce and ramp up so quickly?
Ken Rueter: Well, actually for this job it was not that hard because everybody wants to come and live in Oak Ridge, Tennessee, want to live in East Tennessee. So we have jobs at varying locations and you could argue some are not garden spots because they’re fairly isolated or they have very challenging climate conditions. This job is the most popular job we have out of either of our parent owners—we're 55% owned by AECOM Corporation, 45% owned by Jacobs Corporation. Our parents sourced the job for us initially with these 100 folks. Where we typically are more having to go out and press and ask for people to join jobs, we actually had a winner’s problem with regard to five or six deep in the interest factor of an opening. It was fantastic.
Ken Rueter: I have worked at every environmental cleanup site that the Department of Energy has across the nation—a couple of them more than once—and this job was the easiest one to source that I ever experienced. And it is the—you know, I’ve always prided myself on being affiliated or part of professional and high-performing teams—this one has set a new water mark for me.
Cathy Ackerman: So it’s very rewarding from that standpoint. What are you proudest of in terms of your involvement with this enormous job?
Ken Rueter: Well, I’ll answer it from the standpoint that I think a lot of people would expect me to answer from how much environmental cleanup we’ve done, what we’ve remediated. I see that as the price of admission. That’s our obligation to do that. I mean, that’s the definition of success or not, not what is the most significant thing.
Ken Rueter: What I see as the most significant thing and individually feel the best about is the synergy that we’ve been able to establish between being the largest and highest performing cleanup contractor and job within the Department of Energy portfolio and how we’ve used that to enable economic development and employment prosperity.
Cathy Ackerman: I’m really interested in you talking about that a little bit.
Ken Rueter: So we have been focused on that from the beginning. This is this "Investment Worthy," this is the commitment that we, and in many cases I individually made to the workforce, which is: we were going to run this organization from what we refer to as a "shared governance" model. Everyone sat at the table because of the significant role that each party plays in being able to get to be in the highest performing team possible.
Cathy Ackerman: So a lot of consensus building.
Ken Rueter: It is, it is. A lot of active listening, a lot of voices. And then the responsibility of myself and the executive team that makes up the Office of the President is then integrating and building the gestalt from all that input. And I feel we’ve done that.
Ken Rueter: The outcome foundationally is obviously the environmental cleanup and all that’s been done, but the amount of economic development that it’s brought has been approximately a quarter of a billion dollars a year now into East Tennessee.
Cathy Ackerman: Give us some examples.
Ken Rueter: So our financing level for the job was roughly right at about the $400 million a year level when we first came here—certainly short of where we needed to be that was related to challenge two. We are now being financed at about $650 million a year. All of those dollars ultimately end up in wages that get returned back into East Tennessee because that’s right, but we do $120 million a year in subcontracted work, we do $100 million a year in small business work. And so all those dollars are being returned back into the community and growing these businesses, turning small businesses into moderate-sized businesses.
Ken Rueter: And that’s just the direct dollar measurement. We’ve worked with the Haslam School of Business with regard to a more economic analysis of it and what the multipliers are—the number’s obviously much higher than $250 million a year. To me, a quarter of a billion dollars is a lot of money.
Ken Rueter: And then when it comes to employment prosperity, we’ve gone from 1,250 to 1,900. So 700 roughly 700 people more are working in East Tennessee. Actually a lion's share of the new folks that have come to work for us come from the Northern counties, which are the distressed counties, and so we’ve worked in partnership with the Appalachian Regional Commission to facilitate an employment development and prosperity opportunity back in.
Ken Rueter: What we’ve done is what I’m most proud is: we have turned environmental cleanup into a multi-billion dollar industry in Oak Ridge, Tennessee. That has a very bright future associated to it because there is a significant amount of cleanup to go on the other portions of the reservation to meet our federal and moral obligation to complete the Superfund cleanup of the entire reservation, not just the East Tennessee Technology Park.
Cathy Ackerman: So are you finished or almost finished with the East Tennessee Technology Park portion of this?
Ken Rueter: Yes, we’re very close. So we have a pretty comprehensive strategic plan or playbook as you would hope every team has and it had three visions in it. The first vision was related to finishing the gaseous diffusion plants themselves—it was referred to as Vision 2016, that’s done, finished accordingly.
Ken Rueter: The next is what’s called delivering Vision 2020. That’s the completion of the East Tennessee Technology Park. We are contractually obligated to finish that by around the late July of 2020 timeframe. We are on track for end of April, end of May somewhere in that window.
Cathy Ackerman: On track?
Ken Rueter: And in addition to that, we’ve been able to accelerate the actual completion by over four years. Originally our contract had us only going through a certain number of the buildings, not completing the site in totality. Through our performance—again, back to item one, recovering the job, triaging the patient, and then moving on to their recovery—we’ve been rewarded if you will with being given the opportunity to complete the entire site. And we’re doing that four years early.
Ken Rueter: The outcome of that is approximately a $600 million savings to the federal taxpayer in reducing environmental liability. A majority of the ETTP site cleanup is actually coming through a federal trust fund. Those trust fund dollars are very precious because the trust has been fully funded, so as a result every dollar we save out of that trust fund goes to enabling more cleanup at the other gaseous diffusion sites at Portsmouth, Ohio and Paducah, Kentucky.
Cathy Ackerman: Oh that's interesting.
Ken Rueter: It really has a multiplying beneficial effect more than just saving Treasury $600 million, it’s going to enable additional cleanup or even cleanup sooner up at the other two gaseous diffusion sites.
Cathy Ackerman: A project like this has to have safety at its very core in terms of the work that you’re doing. Talk about the safety record a little bit on this project.
Ken Rueter: Well, I’ll start with the hazards that we’re managing. This is some of the most hazardous work that our workforce, our workers can face probably in any industry. We have significant industrial safety hazards because of the physical status of the buildings—they’ve been excessed, they’re deteriorated, things of that nature. So life safety is a predominant focus at all times, that’s referred to as industrial safety.
Ken Rueter: We obviously have the nuclear component of it, so radiological risk is significant and comes in many forms, and we see all those forms. And then there is the whole chemical toxicological aspect of it, whether it’s asbestos or mercury or lead or cadmium or beryllium—you can go on and on. And so the integrated hazard suite that we face is significant.
Ken Rueter: So we have to have a very different approach to basic safety and health. And so we implement what we call a "Culture of Excellence" in which we culturally, more than just program and process but culturally, develop our organization with an understanding and appreciation that every task, every activity, every time could be done safely.
Ken Rueter: So if you’re in a 5,000-step procedure or work package, if you apply that mindset to every activity, every step, every task, every time, you will be at a zero injury state regardless of what the hazard is.
Ken Rueter: What’s great about the Culture of Excellence from my point of view is it is associated that to performance. So high-performing safety is high-performing productivity. They’re not mutually exclusive. So you don’t get caught in that trap of...
Cathy Ackerman: ...of either/or.
Ken Rueter: Right. "The best safety is when you do nothing." People can get trapped in that paradigm and it can get very difficult to extract yourself from it. And so you see productivity at the expense of safety or worse yet you see safety at the expense of productivity.
Ken Rueter: And so what we’ve done is through the Culture of Excellence been able to embody that. We’ve really—and how that’s managed through a number of different things—but one of them is to get yourself to a self-managed state regarding safety. It’s referred to as Voluntary Protection Program. Very few sites in the nation get that, it’s referred to as Star status.
Ken Rueter: And I’m happy to tell you that we have Star status. It has to be re-certified every three years, we just had our re-certification. And in a midst each year between your certifications you get a level of excellence and we got "Star of Excellence" every year.
Ken Rueter: The outcome of that—and I’m careful with safety statistics because sometimes people will get lost in them and you know how numbers and statistics are, people can do things—but our, when you layer our safety statistics against general industry and the hazards we face, it’s five times safer to work at UCOR than general industry.
Cathy Ackerman: That’s amazing.
Ken Rueter: We’re always about half our safety goals. We achieved something that we have been working towards for five years, which is to get to what’s called a "Zero Severity Index." It doesn’t mean we didn’t have first aid cases or injuries on the job, but their severity index was zero meaning the people were not impeded by the injury in their ability to do their work and earn their livelihood.
Ken Rueter: What’s important on that is it’s very personal. I made a commitment at the very initial town halls when we transitioned the job, summer of 2011, that my commitment to all of them at that time was that together we will ensure that you have a work environment that allows you to go home the same way you came to work each and every day. And so to me that’s a material delivery of that commitment to them.
Cathy Ackerman: So you have a lot of key learnings that it sounds like can be transferred into all kinds of other industrial settings. Is there an effort in any way to take what you have done so well and package it up so that other companies, other types of industries who are involved in safety situations can learn from that?
Ken Rueter: Yes, yes there is. And so we do it through a number of different venues. One, we do it internal to the Department of Energy or the federal agency that is our client and customer—they have a "Continuous Improvement Forum," and we have been an active leader and participant in that.
Ken Rueter: Predominantly from three points of sharing. One, the Culture of Excellence which we just talked about. Two is the point I made earlier with regard to within our industry figuring out a way to make shared governance work, which typically is only used in the healthcare industry but we’ve adapted it for ours. And then thirdly is our labor management approach. We’re a very labor-centric company because that’s where the work face is, those are the people that face the hazard every day, and so we believe in partnerships they are fundamental or core to shared governance. And one of the most significant foundational partnerships is with labor, with the unions that represent the folks that do our work. So that’s been our three focuses in the agency.
Ken Rueter: We’ve been doing similar in more commercial venues. I just got back from Chicago, I spoke at the American Society of Safety Professionals with regard to the critical role leadership plays in empowering a safe work environment and worker engagement, worker involvement.
Ken Rueter: And then lastly I’ve been for years now the national contractor representative in an organization that’s called CPWR, it’s the Center for Construction Excellence and Safety. And we share a number of these Culture of Excellence components through that to try to spread it broader throughout industry. Like with this latest keynote I had, actually there was nobody from our specific industry there. It was Fiat Chrysler, L.L. Bean, Republic Services—companies of that magnitude.
Cathy Ackerman: That’s wonderful. What does all this mean for the community and for the broader region even beyond Oak Ridge per se and maybe even beyond East Tennessee? What are the things that are happening there that we can look at in the future and say because of this cleanup work, because of the excellent job that UCOR did, our community now looks like this?
Ken Rueter: Again I think it’s three things and it fits back directly to our mission and these end-states. First of all, our region, our state, Eastern Tennessee, Roane, Anderson County, the city of Oak Ridge are going to be able to look and go: we have one of three sites that make up the 409th National Park of our country. And people are going to come from the Smokies with their passport and they’re going to be excited about getting it stamped here and we’re going to have Junior Rangers and we’re going to have... and that’s all started, we’re going to have all that.
Ken Rueter: The next is we’re going to have large-scale Brownfield redevelopment on a scale comparable to Volkswagen. You know, I think communities are quite aware of this: there’s a pursuit for the establishment in the last decade of one of the first regional general aviation airports. There’s going to be the siting of a medical radioisotope firm as one of the Brownfield sites.
Cathy Ackerman: How exciting!
Ken Rueter: Right. We have the whole carbon fiber initiative that’s going on and all that’s associated to that. I mean it’s little known, but there’s a number private sector businesses that are already there as part of the re-industrialization, approximately 200 people employed for them right now. And so we’re going to have this large private sector industrial park referred to as Heritage Center that’s going to be hosting all of those things contributing to the nation. I mean it’ll be the only medical production isotope firm in North America.
Cathy Ackerman: When will that be?
Ken Rueter: I think they’re pursuing licensing right now. We have conveyed the land to them, they are owner of the property. I think they’re working on financing things of that nature, so the word I get back is still very encouraging with regard to that.
Ken Rueter: And then the third piece is essentially almost a national-level destination area associated to this conservation area. I mean, the conservation area as it’s integrated with the two counties, the city, the greater regional initiatives that are being done here in Knoxville are essentially making this area a destination for outdoor recreation and multi-use that’s comparable to Boulder, Durango, Santa Fe. I mean you can go on and on.
Cathy Ackerman: And as somebody who is a cyclist in your spare time—I can't imagine how you have much spare time, but I know that you’re an avid cyclist—talk about that a little bit from a personal standpoint in terms of what’s happening with Greenway connections and some of the natural assets that are being developed in your area.
Ken Rueter: You know, for me personally there’s a great synergy there because I’ve been in environmental stewardship by most of my life. It’s really been focused on the environmental cleanup and then the practical beneficial reuse.
Ken Rueter: And so my personal interests connect very well—so I’ve been quite a multi-use conservation focused individual for a long time. It’s varied with regard to involvement because each community that I’ve lived in has been a bit different, but this one has been so embracing and it’s been so facilitating. So I’ve had the opportunity to now be part of Foothills Land Conservancy, part of Legacy Parks Foundation, part of the Clinch Valley Trail Alliance and be part now as an individual in giving back, feeding forward with regard to growing that opportunity.
Ken Rueter: And you know, and I’m the first to admit I see a lot of personal outcomes associated to it both to my individual interest but I can’t tell you how exciting it is. I have five grandkids. I have three that live in the East Coast and one of them isn’t old enough to ride a bike or do much multi-use things yet, but two of them are and so to take them to the pump track at Baker Creek Preserve or to go on an extended hike at Haw Ridge with them—I was just looking at pictures the other day of my oldest grandson but he was only two at the time in the backpack with my wife and I doing a connection hike between the UT Arboretum, Pine Ridge, and we live close to Haw Ridge.
Ken Rueter: So those kind of connections are great, and I am appreciative that we have a client or an owner, being the Department of Energy, who embraces and embodies that. So we have provisions in our contract that encourage us, enable us to be civic minded that way. So we have built a community involvement investment plan that has four fundamental elements to it and which one of them is conservation and civic investment in these areas, and it’s just been fantastic.
Cathy Ackerman: And the land itself is so beautiful. It has been unused for a long, long time because of where Oak Ridge has been in the past, but absolutely gorgeous pristine land that can be made into beautiful parks and beautiful greenways.
Ken Rueter: Yeah, absolutely. And again a lot of credit to the owner, to the federal government as the mission changes at the site, becomes more centric to the Eastern part of the reservation, the remediation of East Tennessee Technology Park, those end-states, National Park, building connectivities, interpretive walkways—all those kind of things is flourishing.
Ken Rueter: And you know, a number of the very senior Department of Energy leaders have been very vocal on this as re-purposing this, not just here, at many of the sites, DOE locations, for the beneficial reuse of the community, whether it’s conservation, historic, or Brownfield redevelopment.
Cathy Ackerman: Exciting times for you, for UCOR, and for the region that you’re impacting so greatly.
Ken Rueter: I actually am appreciative of carrying the message and being able to speak to it. I do have a lot of energy for it and some intensity and passion for it, which is all good! And I just I very much value the connectivity between individuality, family, company, team, partners, community.
Ken Rueter: I many times tell our team—I’ll finish up with—that it is a winner’s problem, first of all. And second of all, you work and deliver to the side of the angels every day. And not only should you feel good about it, but you’re on that side. I mean, and you have all those that I mentioned are the beneficiaries of those outcomes. And I feel a majority of our workforce, our community partners, all share and feel that way.
Cathy Ackerman: That’s wonderful. Ken, thanks so much for joining us today and for providing some interesting glimpses into one of the region’s largest and most important projects. We appreciate you sharing this fascinating history and your thoughts on why your company has been so successful in leading the way. So thank you for all you’re doing for future economic development in East Tennessee and thanks for being with us.
Ken Rueter: Thank you very much, appreciated.