Alcoa job cuts will happen by the end of the next quarter. To reduce aluminum production, the company is closing three smelting operations and eliminating at least 1,500 jobs.
In September, Alcoa executives announced plans to split the company into two separate entities.
As reported by the Inquisitr, Alcoa will continue its aluminum production as well as bauxite mining and alumina refining. Meanwhile, the second company will focus on rolled products, engineered products, and various construction businesses.
Job cuts by Alcoa should not come as a surprise. The demand for aluminum has been steadily dropping, and supply of the metal has flooded the market. In the meantime, countries such as China continue to increase production. This makes it difficult for companies like Alcoa to maintain a consistent profit.
In light of this, Alcoa has been struggling to cut costs and supply as the price of aluminum is at a six-year low. To add to the company’s troubles, Alcoa stock price plummeted 30 percent earlier this year, while some reports indicated an even greater drop.
According to Q13 Fox News, Alcoa’s two production facilities in Washington will be closed. Aluminum production operations in Ferndale and Wenatchee are on the chopping block.
However, company representatives say the Intalco casthouse will remain open in Ferndale with only a few job cuts there.
Washington Governor Jay Inslee is disappointed with the Alcoa notice.
“Today’s news is a tough blow for many hard-working Washingtonians and communities like Ferndale and Wenatchee where Alcoa employs hundreds of men and women.”
Ferndale Mayor Gary Jensen was also disappointed with the news. Besides the workers directly impacted by the Alcoa job cuts, he noted that other local businesses are affected as well. More people out of work means less disposable income and spending within the community.
Showing his frustration, Jensen lamented, “[T]his is not a good day for Ferndale.”
Another smelter plant is closing in New York. In a report from North Country Now, Alcoa is laying off workers and closing operations in Massena. Approximately 487 people will be out of a job when the facility becomes idle.
This comes as unwelcome news to a community already suffering from an economic downturn. Local officials have expressed concerns about the welfare of displaced workers and plan to ask for additional assistance from state and federal governments. They also plan to ask more from Alcoa.
Massena supervisor Joe Gray believes Alcoa needs to do more to help the local area.
“I think there needs to be some sort of community benefit payment… a community enhancement or benefit fund, the employees should get more than a typical severance.”
Moreover, Gray says Alcoa owes them. Gray contends they are a large corporation with a long-standing tradition in the community. And part of Alcoa’s global success was made possible by the people of Massena, who deserve better treatment after the job cuts.
Currently, there is no indication of how long the sheltering plants will be closed. There is no stated timeline, yet the company will continue to monitor market conditions and its ability to compete globally.
Alcoa communications director Josh Wiland hinted at a possible reopening should the right conditions exist.
“The decision to restart the operations would include a series of factors, ranging from global market conditions, regulatory certainty, capital investments, energy pricing and alignment with Alcoa’s strategy to create a globally competitive commodity business.”
According to Wiland, Alcoa will be supporting employees as much as possible during the transition. The company will be offering benefits and services to employees affected by the job cuts. Despite this, employees will not be paid while the smelters are closed.
In the third quarter, Alcoa’s profit declined 70 percent as aluminum prices dropped and demand was low. The closings are a part of a difficult but necessary strategy to keep the company in the black. Just how many Alcoa job cuts will happen is still unclear.
[Photo by Jeff Swensen/Getty Images]