Local leaders believe Massena will be spared from Alcoa’s cuts

MASSENA — Local leaders hope that Alcoa’s announcement last week that it will reduce smelting capacity by 12 percent will not affect the plants here negatively.

“There are a lot of questions, a lot of uncertainty with this happening just after our restart here after a two-year curtailment,” said David W. LaClair Jr., president of Local 450-A of the United Steelworkers. “There’s always a lot of uncertainty. But we’re running really well, and we hope to keep it that way here.”

Alcoa announced in March it was restarting operations at the Massena East plant, which has 300 hourly employees and 300 salaried workers. A plant in Washington state also was brought on line last year.

But on Thursday, Alcoa said it is permanently curtailing operations at a smelter in Alcoa, Tenn., and two of its six potlines that are down at a Rockville, Texas, plant.

Mr. LaClair said he suspects the announcement in November that Alcoa had hired Bechtel Engineering, a worldwide firm with a presence in Montreal, to work on the Alcoa East modernization project is positive news for local operations.

“We have had no information given to us, but I would expect the modernization planning work would keep moving forward. You can bet we’ll be watching with our fingers crossed when the Alcoa board of directors holds its next meeting,” he said.

Laurie A. Marr, spokeswoman for Alcoa in Massena, said engineering and design work for the Massena modernization project is continuing with a March 2013 deadline to present the proposal to Alcoa’s board.

Ms. Marr said Alcoa’s curtailment announcement last week came in response to changing market conditions and business challenges facing the corporation in 2012.

“While I can’t say at this point if this announcement will affect our plant, we continue to focus on being the safest, lowest-cost producer,” she said in an email.

Alcoa signed a 30-year low-cost power contract with the New York Power Authority that will provide the corporation with some of the most favorable power rates in the world. But that contract requires to Alcoa to make at least $600 million in capital improvements to its north country plants, maintain at least 900 jobs in Massena and support the North Country Economic Development Fund to get those rates.

Ernest J. LaBaff, president emeritus of the Aluminum, Brick and Glass Workers International Union and a retiree from the former Reynolds plant that is now Alcoa East, said he remains confident about the company’s future in Massena.

“I think we are safe in Massena,” he said. “As long as we have the Power Authority and the power contract we have on the table, things are pretty good here in Massena.”

Alcoa announced Thursday it intended to close or curtail approximately 531,000 metric tons or 12 percent of its global smelting capacity to lower the company’s costs and improve competitiveness. The closures in Tennessee and Texas will reduce Alcoa’s global smelting capacity of 4.5 million metric tons per year by 291,000 metric tons, or about 7 percent.

The Daily Times of Maryville, Tenn., reported Friday that the news Alcoa was closing its Tennessee smelter was not a major surprise.

“Alcoa and the Tennessee Valley Authority have been engaged for years in unsuccessful negotiations for a long-term power contract,” the newspaper reported.

The Alcoa release said further curtailments to be announced soon will reduce its global smelting capacity by an additional 240,000 metric tons, or about 5 percent.

Aluminum prices have fallen more than 27 percent from their peak in 2011. In addition to the curtailments, the company said, it will accelerate actions to reduce the escalating cost of raw materials.

The curtailments are expected to be complete by the first half of this year.