Kaiser cutting jobs at Mead, Tacoma
Low aluminum prices push company to make cutbacks
John Stucke - Staff writer
Kaiser Aluminum Corp. handed layoff notices Friday to 65 managers and 53 Steelworkers at its Mead and Tacoma smelters.
Slumping aluminum prices and expensive electricity are to blame for the uncertainty surrounding a restart of the smelters, said company spokesman Scott Lamb.
Dec. 12 will be the last day for 59 managers at Mead and six at Tacoma. The job cuts leave 84 managers at the massive plants.
The affected Steelworkers will be turned out on Dec. 10. A handful will be kept on staff.
"We're in a situation were we would like to maintain a core group for administrative and maintenance tasks ... so when we get to that point in time to restart, we're ready," Lamb said.
Both smelters sat idle during the past year as Kaiser found it was more profitable to sell electricity than make metal. The company netted about $460 million by selling its allocation of power generated from federal dams.
The company retained its management, but laid off more than 650 Steelworkers.
Dan Russell, president of Steelworkers Local 329, said the latest round of layoffs were expected.
"It doesn't really come as a surprise," he said. "I mean, what was management doing there anyway?"
Russell added that Steelworkers had little sympathy.
"Truth be known, it's hard to feel a lot of sadness," Russell said. "Some of them were Steelworkers who crossed the picket line to become management, and now they're finding out their true value."
The layoffs at Mead follow a busy week for the Houston, Texas-based company.
On Thursday, CEO Ray Milchovich resigned to take a job with a different company.
And last week, the Kaiser reached an agreement with the Bonneville Power Administration that gave the company the right to accept or refuse its massive electricity allocation without financial penalty.
The agreement also ended the dispute surrounding use of the money from the electricity it sold. Kaiser can keep the money instead of sharing or spending it within the region.
The layoff announcement for Mead comes about three weeks after a similar announcement at the company's Trentwood rolling mill.
Kaiser cut 65 management jobs at Trentwood because of the weakening economy and expected cutbacks in demand for aluminum used in the aerospace industry.
All laid-off management are eligible for separation packages that may include severance pay, retirement benefits and continued medical coverage, Lamb said.
While the management cutbacks at Trentwood were permanent job reductions, Lamb stopped short of saying the same for Mead managers.
"We're unsure how long the smelter is going to stay down," Lamb said. "We're in a situation where we would like to maintain a core group for administrative and maintenance tasks."
Lamb declined to say when the smelter might restart. He said that Kaiser believes the Pacific Northwest has the right fundamentals, such as cheaply produced electricity, to support aluminum smelters.
Aluminum is fetching about 58 cents a pound on the spot market. Most companies need prices in the 70-cent range to operate profitably, Lamb said.
Russell said Steelworkers have readied the smelter for restart when the time arrives.
"If the price is right, I think they'll start making metal," he said.