Intalco to lay off 24 workers on Oct. 1
INDUSTRY: General manager insists smelter is more likely to restart than pack up for good.
Sharon Michael, The Bellingham Herald
Twenty-four Alcoa Intalco Works employees are scheduled for layoff Oct. 1 as a result of the company's agreement with the Bonneville Power Administration to shut down production at the Cherry Point smelter for as many as two years.
Intalco General Manager Jim Frederick said he met Tuesday with the employees who will be laid off. Frederick told the Northwest Business Club Wednesday that the company will do what it can to help the workers find jobs in the area before Oct. 1, the official starting date of the agreement.
Intalco had announced earlier that some people would lose their jobs, but officials did not know then how many workers would be affected.
Ready for restart
BPA agreed to give Intalco money to pay most of the smelter's 930 workers in exchange for idling the plant. Idling the plant will make more affordable power available to other BPA customers.
"They're paying us not to use electricity," Frederick said, likening the agreement to farm subsidies. "I never thought I'd agree to anything like that."
But he said it was the best deal the company could get and it allowed them to keep their employees and keep the smelter ready to restart.
Intalco and other Pacific Northwest aluminum operations had lobbied unsuccessfully for a plan that would allow all BPA customers to purchase 75 percent of their power needs at BPA's traditionally lower rates and pay higher market prices for the remainder.
"We were winning the publicity battle, but we weren't winning the political battle," he said.
Alcoa Inc. is committed to keeping the plant ready to reopen on short notice, Frederick said.
BPA reviews rates every six months. The next review will come at the end of December for rates that would go into effect April 1.
Each time BPA announces new rates, Alcoa will reassess the Cherry Point shutdown, Frederick said. Even when rates become affordable, Frederick said he also would have to be confident that power rates would stabilize or continue to fall before he could recommend restarting the smelter. But if energy supplies remain low and demand and costs remain high, BPA also could be interested in extending the two-year agreement, he said.
Biding time
In the meantime, Intalco employees are using their time to catch up on training and onsite projects. Frederick said the hourly and salaried employee teams put together 10 project categories and formed teams to plan and execute the work.
Some people are doing pretty much what they had done before, Frederick said. Others are doing painting, cleaning, equipment and facilities maintenance, as well as working on other projects they have always wanted to get done but didn't have time to do. Some are on temporary assignments in other Alcoa facilities in the United States, China and the Netherlands.
Employees also are doing grounds maintenance, at least for now. When the contract landscaper wanted out because he wasn't making any money on the job, an Intalco crew took over the work temporarily.
"When we start back up, we won't pay people $20 an hour plus benefits to do that kind of work," Frederick said.
A community-service team also is working with the Whatcom Volunteer Center to plan how to best utilize available labor on community projects.
Naida Deitsch, secretary-treasurer of the Northwest Business Club, asked Frederick if the idling of Intalco and the permanent shutdown of Georgia-Pacific West Inc.'s pulp mill on the Bellingham waterfront was a "wakeup call" for city and county officials about the need to work with industry and other businesses to keep jobs in the county.
"Boy, I would hope so," Frederick said. "I think the community recognizes it."
The Northwest Business Club is a nonpartisan group of active and retired business people who support fiscally conservative, pro-business issues and candidates in Whatcom County.
Frederick said Alcoa is exploring every alternative for getting the Cherry Point smelter back in production as soon as possible, including possibly producing its own power.
"We're also out there scrambling trying to find new power sources," he said.
Frederick is confident that Alcoa will not close the facility permanently, even though the trend is to build new plants in places where cheap power is plentiful, such as Quebec, South Africa, Mozambique and the Middle East.
"The least likely alternative is that we would shut the plant down and walk away from it," he said.