Liftoff in Lynchburg
Former NASA official sets the course for a new company with a long legacy
Rex Geveden was 8 years old when U.S. astronauts landed on the moon in July 1969.
“We all watched that on television … my parents woke me up at night for it,” he recalls. “It had a profound influence on me, and it caused me to be interested in science.”
The moon landing inspired the Mayfield, Ky., native to earn bachelor’s and master’s degrees in physics and go on to work for NASA, eventually becoming one of its highest-ranking officials.
A private industry executive for the past decade, Geveden in January became president and CEO of Lynchburg-based BWX Technologies Inc. (BWXT), which has annual revenue of $1.5 billion.
BWXT supplies nuclear components and fuel to the U.S. government and also provides it with technical and management services in the operation of complex facilities and environmental remediation activities. The company also provides precision-manufactured components, services and fuel to the commercial nuclear power industry.
During his 17-year NASA career, Geveden was promoted to associate administrator, essentially the agency’s chief operating officer. In that position, he managed a $16 billion portfolio that included all of the agency’s technical operations. Geveden was responsible for all mission areas and also oversaw NASA’s 10 field centers, including Langley Research Center in Hampton. “It was a great job,” Geveden says. “I loved it.”
By 2007, however, Geveden was ready for a new challenge. “I began to think I wanted to try my hand at industry, so I kept my mind open to that possibility and put myself out there.”
Geveden spent the next eight years with California-based Teledyne Technologies, a conglomerate involved in digital imaging, instrumentation, engineered systems, and aerospace and defense electronics. He was promoted to executive vice president of the parent company, leading two of its four operating segments, and president of Teledyne DALSA, the company’s largest subsidiary.
In 2015, Geveden joined BWXT as chief operating officer. At the beginning of this year, Geveden succeeded Peyton S. “Sandy” Baker as president and CEO. In promoting Geveden, BWXT Executive Chairman John A. Fees praised his performance as COO. “During his time as COO, Rex has demonstrated the strategic vision and execution delivery required to take BWXT to the next level of growth and shareholder value.”
At BWXT, Geveden has the opportunity to guide a new, publicly traded company that nonetheless has an extensive legacy. Its former parent company, the Babcock & Wilcox Co., was established in 1867. B&W began operations at the Lynchburg Research Center, the first privately financed U.S. nuclear facility, in 1956.
In 2015, BWXT and Babcock & Wilcox separated into two publicly traded companies, with BWXT keeping nuclear and government operations and Charlotte, N.C.-based Babcock & Wilcox Enterprises keeping the fossil-fuel power generation business.
In first-quarter earnings announced in early May, BWXT had revenue of $428.2 million, up 17 percent from $364.8 million in the first quarter of 2016. Earnings per share for the first quarter were 55 cents, compared with 47 cents during the same period the year before.
BWXT has 6,100 employees globally, including about 2,500 in the Lynchburg area. Its operations are divided into three reportable segments (groups that are managed separately, with each having unique technology, services and customer classes): Nuclear Operations Group, Nuclear Power Group and Nuclear Services Group.
The Nuclear Operations Group accounts for 70 to 80 percent of the company’s revenue. BWXT is the sole manufacturer of the nuclear-reactor cores of every new submarine and aircraft carrier in the U.S. Navy’s fleet. That business is expected to benefit from plans by the Trump administration to increase the number of Navy ships (now fewer than 300) to 355.
The Nuclear Power Group includes BWXT Canada Ltd., which serves nuclear power plants in Canada. In December, it completed the acquisition of GE Hitachi Nuclear Energy Canada Inc., now called BWXT Nuclear Energy Canada Inc., a major supplier of fuel, fuel handling systems, tooling delivery systems and replacement components for CANDU (Canada Deuterium Uranium) pressurized heavy-water reactors.
The Nuclear Services Group includes BWXT Technical Services, which manages federal sites, including weapons complexes and nuclear facilities. A joint venture involving BWXT and two other companies, Four Rivers Nuclear Partnership LLC, has been awarded a $1.5 billion, 10-year deactivation and remediation contract by the Department of Energy for its Paducah Gaseous Diffusion Plant in Kentucky. The group also includes BWXT Energy, which provides nuclear components and services to the U.S. commercial nuclear energy industry.
“We’re seeing lift in all three segments of our business,” Geveden says.
BWXT, however, is winding down one long-term project. For many years, Generation mPower, a partnership originally involving Babcock & Wilcox and Bechtel Corp., has been developing a small, modular nuclear reactor called mPower.
In March 2016, the partners (now BWXT and Bechtel) entered an agreement to restructure the mPower program. During the next 12 months, Bechtel sought additional outside investment to complete development of the reactor’s design to earn Nuclear Regulatory Commission certification. In March this year, Bechtel said it was unable to secure sufficient funding to continue the program. It invoked the settlement provisions of the 2016 restructuring agreement to end the program. As a result, BWXT paid Bechtel a $30 million settlement, an amount that both companies had agreed upon in the restructuring agreement.
Away from the office, Geveden’s interests include music (especially jazz), hiking and reading. He is a big fan of University of Kentucky basketball.
Geveden and his wife, Gail, have been married for 35 years. Their primary residence is in Forest, just outside Lynchburg, and they have a second home in Birmingham, Ala.
The couple has two adult children, a daughter and a son. The daughter, her husband and their two children live in Birmingham. The son lives in Thousand Oaks, Calif.
Geveden is optimistic about the prospects for his company. “We have some exciting projects going … and we expect to be able to create some organic growth for the business from that activity, he says. “We do have some opportunities and tailwinds in our natural markets, but we’re expecting to create our own future with our research projects and technology breakthroughs as well.”
Virginia Business interviewed Geveden at his Lynchburg office in late May. The following is an edited transcript.
Virginia Business: [How has the GE Hitachi acquisition in Canada impacted the company?]
Geveden: One of the reasons we did the acquisition is because we really like what we see in that market … There are some very favorable conditions there. In that market, we have a good brand and a good reputation … But with GE Hitachi, we doubled our footprint, financially and operationally, in Canada … BWXT had been building steam generators and things that are around the perimeter of the reactor. GE makes … things right in the core. So getting GE gave us knowledge and credibility about the core of the reactor. And that’s important because in that Canadian market, 10 of the 19 CANDU reactors are going through refurbishment. They’re almost being completely rebuilt when you refurbish a CANDU reactor. And so what had been a billion-dollar market that we can address up there becomes annually a $2 billion market we can address. …
VB: Do you foresee a renewed interest in nuclear energy in the U.S.?
Geveden: I think so. I think there’s some time for that to occur. There’s a belief that nuclear power in the U.S. has a political problem, and I think that’s misapprehension. In reality, our problem is the nuclear power industry‘s problem in the U.S. is an economic one. It’s fracking and the price of natural gas. It’s just hard to close the business case on starting large nuclear plants. Now, I would say from the standpoint of energy diversity and energy security as a hedge against future fossil fuel prices, there’s a place for nuclear plant construction even now, but we have to get around the economics of it. We have to be able to build plants more economically to be able to compete in the future. I’m pretty optimistic about modular reactors and some of the advanced reactor technologies that we see. They are starting to attract capital in the way commercial space started to attract capital … So there’s some interesting things going on in nuclear technology … and I think they’re pretty promising for the U.S.
VB: What is the status of the mPower program?
Geveden: The mPower program is in a wind-down phase. It’s almost dormant by this point. We didn’t find a customer for that product, and we were spending a lot on it, so we’ve wound it down. We own the intellectual property for it. We own lots of interesting design ideas, patented ideas, and we’ll hold on to that. Hopefully that market opportunity re-emerges in the future. But we’ve made an investment, and we have the products of that investment.
VB: Are you able to find talent that you need for the work you have?
Geveden: We do. Let’s take Lynchburg as an example … We’re in a college town that happens to be bracketed geographically between two very large public institutions [Virginia Tech and the University of Virginia] that produce very high-quality students … We’ve never had a serious shortage of technical talent. We recruit nationally for some executive-level positions. Fundamentally, we’re an industrial company, and a lot of what we do is manufacturing. We have needs for machinists, welders, technicians and areas like that. The feeders for those are the community colleges, with which we are affiliated … These jobs are really attractive because we pay well, for one thing. But maybe more so, there’s visibility into our backlog that’s really decades [long]. We can see the Navy shipbuilding playing out to 2065 in the case of the aircraft carriers. And if you look at the [nuclear] plant life extension work that’s going on in Canada, that’s a 20- to 25-year project, give or take. If you look at what we do at the Department of Energy sites, you can see environmental remediation projects into the 2050s, and you can see weapons complex work that’s going on indefinitely … So we don’t have too much trouble recruiting, and we certainly don’t have any trouble keeping our employees.
VB: What attracted you to this company?
Geveden: What attracted me to the opportunity were probably two or three things. One is the fact that the company was going through a spin, and I was being offered the opportunity to participate in a material way, first as the chief operating officer and eventually as the CEO, in the formulation of the strategy of the company … We’re a fundamentally new public company … That’s a pretty exciting opportunity for me. I also liked it because it was a very pure, strategic entity. It’s very clearly a nuclear company, and I really liked the portfolio, and it looked like it had a lot of financial capability … I’d say the third thing that attracted me was I’m always happiest when I’m learning at a high rate. I had been at Teledyne for eight years and had a good run — it was a very good company. But I had learned the business. This was an opportunity to parachute into a new company with new people and new markets and new technology that’s relatively new to me. That’s pretty intriguing for me.
VB: What was your most memorable event from [your career at NASA]?
Geveden: When we did the space shuttle return to flight after the Columbia accident, that was just an incredible moment for all of us … I was deeply involved in the return to flight efforts. And it was literally an emotional moment for me when we finally launched Gravity Probe B, which is a program I led for nine years. It was a very complex and very sophisticated spacecraft that was an incredible challenge to build and deliver. [The spacecraft, which involved 350 scientists and engineers, tested two fundamental aspects of Einstein’s Theory of General Relativity.] You put your blood, sweat and tears into something like that for eight or nine years. It either works at launch or it doesn’t work … Happily, it worked.
VB: Do you see the future of space exploration being a commercial endeavor?
Geveden: This is the way we were thinking about it when we put together the commercial cargo program [at NASA]: If you ask yourself, “What is the reason for the existence of a government entity like NASA?” I think you’d have to say that NASA should exist in the United States of America because there are certain things our nation ought to do when there’s no business case. There’s no business case for flying a spacecraft by Pluto and taking images … But there’re a lot of reasons a nation should do it, in my opinion. One is, of course, advancing knowledge. [A second reason] is that, in order to do things like that, you create technologies that are economic multipliers for the people of the United States of America. The third reason you do it is: You want geopolitical power. If you’re the nation that’s flying by Pluto, if you’re the nation that’s putting people on the moon, if you’re the nation that’s launching shuttles delivering earth science, that’s collecting gamma rays, there accrues to that nation a certain geopolitical power that’s hard to get otherwise. So that’s the beginning of the discussion. … Now, if parts of that endeavor become routine, like putting cargo into lower earth orbit, for example, and can be commercialized to some degree, I think you should do that … I would like to be able to commercialize certain aspects of NASA. But I don’t believe that you could privatize all of space exploration or all of space science. There just isn’t a business case for that. There is an inherently government role that should remain — in this person’s opinion.