Business News
Alcoa Sets Dates for Employee Layoffs at Rockdale Smelter Due to Local Power Issues
Monday 25. August 2008 - Company Will Continue to Explore Competitive Power Options Will Seek Damages and Other Relief from Luminant in Ongoing Litigation
Alcoa (NYSE:AA) today said it has set dates for the layoff of approximately 300 employees at its Rockdale, Texas, aluminum smelter where the company has idled half of its production. In addition, approximately 100 contract employees will be affected. The plant was partially shut in June 2008 because of ongoing supply issues with Luminants onsite power generating unit, Sandow Unit 4, which have exposed the plant to uneconomical power prices.
Three of the plants six operating potlines were idled as a result of the ongoing unit outages and local energy market costs increasing to as much as $2,000 – $4,000 per megawatt hour during peak hours, which is about 100 times the norm. Since the lines were idled, representing approximately 120,000 metric tons per year of production, Alcoa has negotiated with Luminant to resolve the issues resulting from Luminants inability to operate Unit 4 reliably and has not been able to come to a satisfactory conclusion. As a result, the company has provided the required notification to bargaining unit representatives. Layoffs for approximately 100 employees will be effective August 31st; layoffs for an additional 60 will be effective September 7th. An additional 140 employees will be notified in the fourth quarter.
“This is in no way a reflection on our workforce. They have been doing an outstanding job,” said John Thuestad, President of Alcoas 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 Luminants inability to consistently operate the Sandow Unit 4, has forced us to make this decision. Were 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.”
According to Luminants website, it is a unit of Energy Future Holdings Corp (formerly TXU), which is owned by KKR and TPG Capital.