Addy plant closing
Alcoa to lay off 300 at unprofitable Northwest Alloys
John Stucke - Staff writer
ADDY, Wash. _ Alcoa Inc. will close down its magnesium smelter, throwing more than 300 people out of work and hurting the frail economy of Northeast Washington.
High production costs and collapsing metal prices -- not power woes -- are blamed for the Northwest Alloys shutdown scheduled for late September.
"What happened here is through no fault of the workers," said Elizabeth Fessenden, president of Alcoa's allied businesses division.
The timing of the shutdown is related to the region's energy crunch, but the price of electricity wasn't a factor. Alcoa will return the power needed to run the plant to the Bonneville Power Administration.
The company solicited bids from foreign magnesium suppliers and discovered it was much cheaper to purchase the metal than produce it.
"We don't believe this smelter will ever be restarted . . . and we don't think there will be a buyer for it," Fessenden said.
Workers knew the plant was a closure candidate, but the announcement to lay off almost everyone starting in October and ending in December still shocked some.
"I really thought we weren't going to lose," said Joe Scates, who started at the smelter as a 19-year-old in 1978. "A lot of us didn't think this day would come."
Alcoa managers said 70 to 80 percent of the work force will be eligible for some sort
of early retirement package. An average salary exceeds $35,000 a year, among the best jobs in the county.
And plant manger Jerry Turnbow pledged he would spend the next several months trying to find other job opportunities and retraining programs for workers.
"This is the worst day in my 31-year career with this company," he said. "The only thing that could be worse would be a day with a fatality."
Ranie Girnus said workers are worried.
"This is not rosy, it's really bad," she said, holding the hand of her 11-year-old son, Chance. "Many people had been in denial that this could happen. Now they're in a panic.
"It's just devastating."
Girnus and her husband, Gus, both work at the smelter and are frightened about finding good work in economically depressed Stevens County.
"Getting a job around here for more than $10 an hour isn't easy," she said.
And it's hard, she said, to accept that Alcoa is shutting down the plant and hurting its people so that it can buy magnesium from a competitor.
Many of the employees are simple people who work hard, try to do things right and don't ask for too much in return, Girnus said.
"It feels like a slap in the face," she said. "We did everything we could. For the company to turn around and negotiate ... to bring metal into this country at the expense of workers is really sad."
For Alcoa, it's business. The company hasn't disclosed with whom it is negotiating.
Turnbow, who helped design the smelter and hired many of its first workers, said Northwest Alloys has struggled to be competitive for years.
Magnesium prices have fallen 30 to 40 cents per pound during the past three years. That's more than 25 percent of the metal's value.
Addy was able to keep up with the falling prices by shaving costs and even curbing production by a third this year.
But it couldn't keep pace.
Addy is one of two magnesium plants in the world that uses an outdated process called magnatherm. The other plant is in France, and it's being closed, too.
"That's been the albatross around this plant's neck from day one," Turnbow said. "We have been fighting and fighting, but it was a battle we couldn't win, even though we did everything right."
Other plants use a new smelting technology called the electrolytic process.
When Alcoa built the plant, it didn't compete with many other magnesium producers. Certainly not low-cost plants in China and the former Soviet Union.
Today, it does.
Russia, China, Israel, Canada and Norway have magnesium plants that use the new process where cheap power, not expensive raw materials, is a central ingredient.
That isn't available to Northwest Alloys.
The plant sits atop a dolomite deposit that contains magnesium. To remove the metal, ore is cooked in kilns to force a chemical change.
The ore is then fed into an arc furnace along with several expensive raw materials, including ferrosilicon that is imported from Norway, magnesite shipped from China and specialty aluminum from Alcoa's soon-to-be-idled Wenatchee plant.
In the furnace, the magnesium is vaporized and vacuumed into a condenser where it becomes a molten liquid. It's then transferred to a crucible and poured into ingots.
With magnesium prices dropping, Fessenden said the competition to sell magnesium to Alcoa keeps growing fiercer.
The Addy plant won't be razed soon, although management has plans for the environmental cleanup of equipment and smelter residues.
About two dozen workers will remain on staff after the closure.
Chris Carpenter said he's turning to faith and a chance to retrain: "I'm not going to worry. I've put it in the hands of the good Lord."
He wants to stay in the Chewelah area and has an eye on schooling, perhaps some medical training that he believes will be in greater demand as the population ages.
"I'm going to disassociate myself from this type of industry. It's going away," he said.
Although she said it served as a sort of insurance policy for a magnesium supply, Alcoa's Fessenden characterized the possibility of reopening the plant as little to none.
Turnbow didn't mince words with his workers during two Friday morning meetings.
"At least for a few years, we're not going to take a cutting torch to it," he said.
"You don't deserve this shutdown. We started this thing together, that's the way we'll end it," he continued. "I'm not going to lower my chin a quarter-inch, neither should any of you."