Alcoa announces 3 1/2 year grace period for Massena plant
There was a deep sigh of relief in Massena Tuesday, if only a temporary one. After announcing massive layoffs three weeks ago, aluminum manufacturer Alcoa reversed course. The company said it will keep its smelter in Massena open and guarantee 600 jobs for 3 1/2 years. In exchange, New York state will give the aluminum giant almost $70 million in cheap power and cash for capital and operating expenses.
The deal reduces the number of layoffs to somewhere between 80 and 100. Gov. Andrew Cuomo and Sen. Charles Schumer brokered the deal with Alcoa’s CEO, and they came to the St. Lawrence County town of Massena to announce it in person.
When Alcoa delivered its decision on November 2 to shut down Massena’s smelter and lay off almost 500 people, Cuomo said even he was blindsided.
“This was a universal declaration of war, as far as I’m concerned. This was, ‘we’re closing the plant,” said Cuomo.
Instead of declaring war back, Cuomo said he and Schumer tried to negotiate. For decades, Alcoa was the largest private sector employer north of Syracuse. It generates $340 million for the North Country economy.
At the podium before 150 workers Tuesday, Cuomo said they asked Alcoa, how can we help?
“We understand that the company has to deal with an economic cycle. We understand that the price of aluminum is down. We get it, and we want to help,” said Cuomo.
The state will add to its subsidies for Alcoa -- $30 million toward electricity rates that are already the lowest in the nation -- and $38.5 million in capital and operating expenses. Schumer called it an investment to modernize the plant and make it more competitive with smelters around the world.
“And the combination of modernizing the plant and the best workforce in all of Alcoaland will keep this plant open for generations,” said Schumer to cheers from the employees.
Amidst the hugs and handshakes and fist-bumps – yes, Schumer gave longtime labor leader Ernie LaBaff a fist bump – there were still big questions about Alcoa’s future in Massena. Alcoa’s John Martin acknowledged the deal buys time.
“We now have a bridge to get us through these difficult financial times in this market, and get us to better conditions in the commodity market,” said Martin.
The deal does come with conditions for Alcoa. It will get hit with a $40 million penalty if it lets jobs slip below 600. And the subsidies will decrease if the price of aluminum rebounds.
But this latest scare has drawn more scrutiny to the hundreds of millions of dollars in state resources Alcoa has already received to stay in Massena. Even so, job promises have dwindled from 900 in 2008. And the company has abandoned a modernization of its East plant.
State Sen. Joe Griffo acknowledged the latest infusion of state resources. He says every state is fighting for the manufacturing jobs left in America.
“It’s a larger debate that we need to have and that we should have because there has to be accountability when we put in those resources. Now hopefully the company will do what they need to do to recognize the outstanding workforce that they have and the fact that they probably can’t do it any better or any cheap anywhere else,” said Griffo.
There’s an understanding among many workers this is a problem that won’t just go away. Kevin Condlin has worked here for 30 years. He says somehow the global aluminum market will have to undergo fundamental change.
“Somebody’s going to have to cut smelting capacity, whether it’s in the U.S. or whether it’s China, or someplace else. Without cutting capacity, the price is never going to go back up,” said Condlin.
The United Steelworkers Local 420 still has to talk details with Alcoa -- the precise number of layoffs, early retirement packages. Union secretary Dave LaClair calls the deal a 3 1/2 year “Band-Aid.”
“Hopefully we’re down near the bottom now. The only way to go is back up and see where we stand. It bought us three years. Now we tighten everything up and see how we can make it last from here.”
LaClair nods and shrugs. Today, it’s good news, he says, good news.