(August 22, 2008)—Alcoa said Friday it will lay off about 300 workers at its Rockdale aluminum smelter where the company has idled half of its production in June because of supply issues with an onsite power generating unit, Sandow Unit 4, operated by Luminant.
The move will also affect about 100 contract employees, Alcoa said.
Read Alcoa’s Press Release
The company idled three of the plant’s six potlines in June because of what it said were ongoing unit outages and local market energy costs that increased by as much as $2,000 to $4,000 per megawatt hour during peak hours.
About 100 workers will be laid off effective Aug. 31.
Another 60 will lose their jobs effective Sept. 7 and 140 will be notified of lay offs in the fourth quarter, the company said.
“This is in no way a reflection on our workforce. They have been doing an outstanding job,” said John Thuestad, President of Alcoa’s U.S. Primary Products Division.
“Unfortunately, the power plant that Luminant operates has not been reliable over the past year. The cost of power resulting from Luminant’s inability to consistently operate the Sandow Unit 4, has forced us to make this decision. We’re continuing to speak with Luminant to see if we can secure competitive power to ease the impact on everyone involved -- and we have been forced to seek damages and other relief from them through ongoing litigation.”
Luminant issued a statement Friday in response in which it said, “We believe Alcoa has a history of using layoffs to manage costs and drive their own profitability. This is simply another example. Alcoa has made independent business decisions that have apparently now resulted in layoffs.”
Luminant Statement
Luminant said Alcoa has refused price protections “along with a stable, predictable and economically viable power supply” and instead has “taken an inflexible stance, seeking power at unrealistically advantageous terms and demanding a price far below the prevailing commercial market price.”
Luminant Web Site
Alcoa Web Site
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