MASSENA Alcoa officials announced Wednesday that they will permanently shut down one of three potlines in operation at the Alcoa East plant, but said no layoffs are planned as a result.
The company had announced in May that it planned to reduce 460,000 metric tons of smelting capacity over the next 15 months beyond the 568,000 metric tons that previously had been idled in response to a 33 percent drop in aluminum prices since 2011.
The shutdown will reduce capacity at the Massena plant by 40,000 metric tons per year. Our plan is to have the line out by the end of September. Appropriate steps will be taken to do it safely and carefully, Alcoa spokeswoman Laurie A. Marr said, adding the company also hopes to minimize the impact on the 100 or so affected workers.
We do not anticipate any layoffs at this time, she said. We need to work out details with the union. We havent started those discussions yet, but our plan is to minimize the impact on our employees.
David W. LaClair Jr., president of United Steelworkers Local 450, said Wednesdays announcement has been expected for some time and may not necessarily be a bad thing.
Weve seen this coming, he said.
Mr. LaClair said the closing of potlines was bound to happen as the company moves forward with its modernization project in Massena.
When the modernization happens, as they bring on new potlines, they shut down the old ones, he said. So as long as the process keeps moving forward, this would have happened when the new pots came online.
This spring, Alcoa committed to invest at least $600 million to modernize its Massena operations and retain a minimum of 900 jobs at the companys Massena East and Massena West smelters in return for 478 megawatts of low-cost hydropower from the New York Power Authoritys St. Lawrence-Franklin D. Roosevelt Hydroelectric Plant.
U.S. Sen. Charles E. Schumer said that while Alcoa is calling the potline shutdown permanent, he is optimistic that it wont be.
I am confident that Alcoa is committed to long-term investment and expansion in Massena, he said. Knowing how exceptional the Alcoa workforce is, and the low-cost power contract with NYPA, I hope Alcoa will increase capacity in Massena when the aluminum market improves.
Meanwhile, Mr. LaClair said he is optimistic that layoffs can be avoided.
We will put any option possible on the table to avoid layoffs, he said. If we can accomplish this with no layoffs, thats a positive step.
Mr. LaClair said morale at the plant has been low in recent weeks as rumors circulated.
So at least now we have a path we know theyre going down, instead of all the uncertainty that has been out there for the past several months, he said.
Mr. LaClair said the two remaining potlines at the East plant leave that plant with 80,000 metric tons of smelting capacity. Ms. Marr said the West plant has only one potline; that line produces 130,000 metric tons of aluminum per year.
Alcoa had last shut down its potlines in May 2009 as part of a plan to idle the smelter until market conditions for aluminum improved. Planned layoffs began in mid-July 2009. Those lines were brought back online beginning in January 2011.
As a condition of a deal struck between Alcoa and NYPA at the time, the aluminum company was required to keep at least 250 workers at the East plant for the duration of the shutdown, as well as about 680 workers at Massena West, where production continues.
Ms. Marr said there are about 360 workers employed at the East plant and approximately 700 working at the West plant.
When the potlines were idled in May 2009, workers removed the molten aluminum from the bottom of each of the facilitys 508 pots. They also gathered hardened pieces of a material called bath a key ingredient in the production of aluminum in the weeks after the lines were shut down.
That was the first time in the history of the former Reynolds facility that all of the aluminum potlines were shut down, Mr. LaClair said. When the plant was idled in 1993 and 2002, only portions of it shut down.
On Jan. 7, 2011, Alcoa announced that all 95 employees who were laid off from the plant when it was idled in 2009 were being called back and that 20 to 30 additional employees would be hired.
Mr. LaClair said he recognizes the closure of one potline will save the company money, and as long as no employees lose their jobs, he called the decision positive for everybody. As long as theyre moving forward and we can keep everybody employed, thats positive for everybody, he said.
Massena Town Supervisor Joseph D. Gray said its never good news to see a company scaling back operations, but he did say hes glad no layoffs are planned.
Obviously its not good news. Its disappointing, but its understandable, he said. A huge plus is there are no layoffs. From the communitys standpoint, that is the most important thing.
Mr. Gray said that with the volatile aluminum market, the move doesnt come as much of a surprise.
The price of aluminum on the global market is low. There is too much of it, he said. We were warned a couple of months ago in a meeting with Alcoa that the company was reviewing its operations worldwide and with the glut of aluminum on the market, some of the potlines might be curtailed.
Given the antiquated technology at the East plant, Mr. Gray said, he understands why Alcoa is scaling back there.
Probably one of the key factors they look at is how expensive each plant is to operate, and from what Ive heard for years, the type of smelting process the East plant uses makes great aluminum, but its more costly and messy when it comes to environmental matters, he said. The East plant has a tough time competing in the cost category with other Alcoa facilities.
Alcoa on Wednesday also announced it was temporarily curtailing 124,000 metric tons of smelting at its plant in Brazil.
Johnson Newspapers writer Ryne R. Martin contributed to this report.