Kaiser Aluminum Completes Additional Power Sale and Provides Increased Compensation To Employees
HOUSTON, Texas, December 15, 2000 - Kaiser Aluminum & Chemical Corporation, the operating subsidiary of Kaiser Aluminum Corporation (NYSE:KLU), announced today that it has sold January 2001 power to the Bonneville Power Administration (BPA), as contractually permitted, and has reached an agreement to work with BPA to complete additional power sales. The company also said it had reached a supplemental agreement with the United Steelworkers of America (USWA) to provide increased compensation to affected employees.
"We are pleased to be able to assist BPA in addressing the current energy deficit in a manner that benefits the region, our employees, and the company," said Raymond J. Milchovich, president and chief executive officer of Kaiser Aluminum.
The company continues to have power available for sale covering the period of February 2001 through September 2001 as a result of a previously announced curtailment of its Northwest smelter operations. The company and BPA have agreed to discuss continued power sales, which are permitted by the contract.
As part of its December 14 agreement with the USWA, the company said it would increase the compensation it is already providing to affected bargaining unit employees. Highlights of the increased compensation are listed below.
All bargaining unit employees of the Mead, Washington, smelter affected by the company's November, December, and January power sales will receive 100% of base wages through January 31, 2001. Beginning February 1, 2001, unless other agreements are reached, compensation will revert to a contractually agreed-upon schedule of up to 70% of base wages for eligible employees through the expected curtailment period. All of Mead's bargaining unit employees affected by the November, December and January power sales will receive full medical and dental and other benefits through January 31, 2001. Beginning February 1, unless other agreements are reached, benefit coverage will revert to the contractually agreed-upon schedule of continuation for eligible employees through the expected curtailment period. This enhanced compensation applies to about 545 employees.
All bargaining unit employees at Mead and at the Tacoma, Washington, smelters who are not eligible to receive the enhanced benefits described above, will receive a $1,000 holiday bonus. In addition, certain of these lesser-tenured employees at Mead and Tacoma whose supplemental wage payments may be close to expiration will have those payments continued through January 31, 2001.
Kaiser's net proceeds from the sale are $36 million. The accounting impact of the sale will be reflected in the company's fourth-quarter financial results, net of associated employee and other costs arising from power sales. The net cash proceeds of the sale will be received in February 2001. As previously disclosed, fourth quarter results also may be impacted if the company determines that the uncertain long-term outlook for power in the region requires an asset impairment charge against a portion of the smelters' present book value, which is approximately $200 million.