by NOEL MURPHY
Alcoa will close its Point Henry aluminium smelter and two rolling mills, the company announced this morning.
Alcoa chairman and chief executive officer Klaus Kleinfeld said the company recognised “how deeply this decision impacts employees” as he announced the smelter closure and the rolling mills by the end of 2014.
Alcoa received a $40 million grant from the former Federal Labor Government in 2012, but last month said it was not seeking any further Government assistance for the Point Henry plant.
It has received heavily subsidised electricity since striking a 30-year deal with the former Cain Labor Government in 1984.
The closure does not apply to the company’s Anglesea coal mine and power station which it said had the “potential to operate as a stand-alone facility after the smelter closes”. The plant is expected to be put up for sale.
The smelter shutdown contrasts ground-breaking deal between Alcoa and Ford -– another Geelong manufacturing casualty — to make aluminium cars in the US.
Alcoa, in the meantime, is spending up $US575 million to expand production plants in Iowa and Tennessee to meet demand under long-term auto contracts.
Ford recently unveiled a new all-aluminium F-150, the world’s top-selling truck, at the Detroit Auto Show. The vehicle is more than 300kg lighter than its previous steel design and aimed squarely at enhanced fuel efficiency.
Lara Labor MP John Eren described the Point Henry closure as “yet another kick in the guts for Geelong”
“Sad for workers at Alcoa!” he said. “Another manufacturing company packing up and going.”
Bellarine Labor MP Lisa Neville said it was an “incredibly sad day” for the workers and families at Alcoa Point Henry plant. The first priority is supporting them”.
Premier Denis Napthine said the closure was “sad news for the workers but it’s also sad news for Geelong”.
He said he expected Alcoa’s Portland plant to survive.
“Alcoa told me this would not impact Portland. (It’s) a new … more efficient plant,” 3AW reported him as saying.
Geelong Mayor Lyons said his thoughts were with Alcoa employees and their families. He described the closure as “devastating” and immediately called an emergency meeting with local MPs at City Hall to “do all I can for Geelong”.
The Point Henry smelter was placed under strategic review in February 2012 due to challenging market conditions. A comprehensive review found that the 50-year-old smelter has no prospect of becoming financially viable. The two rolling mills serve the domestic and Asian can sheet markets which have been impacted by excess capacity. Alcoa of Australia operates the smelter where approximately 500 employees work. Alcoa Inc. operates the rolling mills which employ about 480 people.
“We recognize how deeply this decision impacts employees at the affected facilities and are committed to supporting them through this transition,” said chairman/CEO Klaus Kleinfeld. “Despite the hard work of the local teams, these assets are no longer competitive and are not financially sustainable today or into the future.”
The Anglesea coal mine and power station that currently supplies approximately 40 percent of the power needs for the Point Henry smelter has the potential to operate as a stand-alone facility after the smelter closes. Alcoa of Australia will actively seek a buyer for the facility.
The Portland aluminum smelter in Victoria will continue normal operations, as will Alcoa of Australia’s bauxite mining and alumina refining operations in Western Australia.
“These are hard decisions to make,” said Alan Cransberg, managing director, Alcoa of Australia Limited. “We understand how difficult this is for our employees and their families, our contractors, suppliers and community partners. Everyone has worked hard to improve the competitiveness of the smelter and rolling business.
AWU Victorian branch secretary Ben Davis said it was “an awful day for the workers at Alcoa’s Point Henry aluminum smelter and rolling plant, their families and the Geelong community”.
“This loyal, hard working workforce have lived under the uncertainty of Alcoa’s review for 18 months. They have co-operated and implemented productivity improvements and workplace change whenever it was asked of them, and their reward for all that blood, sweat and tears is to lose their jobs. It is a shameful announcement,” he said.
“This closure is not about wages and conditions, or government assistance, it’s all about the high Australian dollar.”
“Geelong is suffering yet another body blow, as this is the latest of a series of closures and job losses.”
“This decision follows on from closures or massive job losses at workplaces such as Ford, Target, Boral Waurn Ponds, Qantas at Avalon Airport and the ongoing uncertainty at Shell. The cumulative effect of this series of hammer blows is much the same as the effect of BHP leaving Newcastle and the privatisation of the SEC in the Latrobe Valley.”
“The State and Federal governments need to belatedly step up and provide an economic assistance package to Geelong as a matter of urgency. The Geelong community needs to be reassured that manufacturing has a future here and they urgently need government help through this series of catastrophes.”
“But let us not forget that this decision is ultimately about the people who work here and they must be in our thoughts today and over the coming weeks and months.”
READ Alcoa’s full statement at https://www.alcoa.com/australia/en/news/releases/PTH.asp
READ Alcoa and Ford’s US deal at http://geelongindy.com.au/indy/2014-01-16/alcoa-ford-deal-aluminium-deal-sidestepping-geelong/
