News - Local News

POSTED: Wednesday, Jan. 07, 2009

Intalco near Ferndale to eliminate 80 more jobs

In response to falling aluminum prices and demand, Alcoa Inc. announced significant job reductions worldwide, including at Alcoa Intalco Works near Ferndale.

There will be 80 job cuts at the Alcoa Intalco Works facility, and an additional 10 contractor positions eliminated, said Mike Rousseau, plant manager.

These job cuts are a result of Alcoa Inc.'s Tuesday, Jan. 6, announcement that it will cut 13,500 Alcoa jobs, or 13 percent of its workforce, and eliminate an additional 1,700 contractor positions.

Rousseau said they don't know specifically which Whatcom County jobs will be eliminated, but the cuts will be "across the board," including salaried, hourly and contractor positions. He expects the cuts to done throughout the first half of this year.

At this point, Intalco is not planning to shut down either of the two pot lines currently in operation, but managers will be looking for ways to cut costs.

"We've been turning over every stone trying to find ways to be competitive, so it is unfortunate that it has come to this," Rousseau said. "It is a commodity business, however, and global demand has fallen significantly the past few months."

Alcoa Intalco Works has already been impacted by plunging aluminum prices. On Nov. 10 the company announced it would cut 50 jobs at the facility. At the end of October, the company announced cuts affecting about 25 Intalco employees and 25 employees of contracting firms. After all three rounds of job cuts are completed, Intalco will have slightly more than 500 employees.

The company will continue to work toward a long-term power agreement with Bonneville Power Administration that would help enable Intalco to keep operating through 2028.

Workers who are losing their jobs will be getting employment assistance. Gary Smith, regional manager at WorkSource Northwest, said they have sent out a special response group to the facility for the first two rounds of layoffs and plans to send them out there again with this latest round. The state agency provides assistance on retraining and help in finding other work.

As a result of its actions, Alcoa Inc. expects total fourth-quarter charges of between $900 million and $950 million. The company plans to report quarterly results Jan. 12. Alcoa also said the moves are expected to save the company about $450 million annually, before taxes.

"These are extraordinary times, requiring speed and decisiveness to address the current economic downturn," Klaus Kleinfeld, Alcoa's president and chief executive, said in a statement.

Alcoa said it will further limit smelting by more than 135,000 metric tons per year, lowering total aluminum output by more than 750,000 metric tons, or 18 percent, annually.

Production of alumina, a material used to make aluminum, will be reduced to 1.5 million metric tons per year in response to market conditions, the company said.

The price of aluminum has dropped significantly in the past 90 days, according to the London Metal Exchange. The price for aluminum on the LME in October was more than $1 a pound; by January it was under 70 cents a pound.

At the Wenatchee facility, Alcoa plans to cut 26 jobs, bringing the total employment at the Wenatchee plant to about 370 workers.

Alcoa also said it will seek to lower costs for energy and raw materials such as coke, caustic soda and aluminum fluoride.

As part of the plan, Alcoa said it would divest its electrical systems, global foil, cast auto wheels and European transportation products businesses.

Shares of Alcoa fell nearly 4 percent in after-hours trade after rising 26 cents, or 2.2 percent, to close at $12.12 on Tuesday.

The Associated Press contributed to this article. Reach Dave Gallagher at 715-2269 or dave.gallagher@bellinghamherald.com.