As Ferndale’s Intalco smelter nears curtailment, chances of saving it look bleak
Workers and local officials have fought for years to keep the Intalco Works aluminum smelter operating near Ferndale. This latest potential curtailment is turning into its toughest challenge yet.
Alcoa announced on April 22 that it will be curtailing operations at the end of July, laying off 700 workers. A small crew is expected to remain to maintain the facility in the hopes that one day operations will restart.
The chances of it restarting appear bleak during this coronavirus pandemic. In its announcement Alcoa cited declining market conditions as a main factor for the curtailment, with the facility losing $24 million in the first quarter of 2020.
The price of aluminum has seen a dramatic drop in the past two years, even before the pandemic took hold around the world. According to the London Metal Exchange, smelters could sell aluminum for nearly $2,600 a ton in April 2018. That dropped to around $1,900 in April 2019. Last month the price was around $1,420.
It also appears that Alcoa is convinced Intalco cannot be saved. The Seattle Times reported on Wednesday, May 13, that in a letter Alcoa’s CEO Roy Harvey told the union that represents Intalco that curtailment was going forward because improvement efforts “have not yielded changes that would improve the competitiveness of Intalco in the foreseeable future.’’
Harvey’s letter to the International Association of Machinists comes a week after U.S. Representatives Suzan DelBene and Rick Larsen, and Senators Patty Murray and Maria Cantwell sent him a letter urging the company to work with the union to find a solution.
“This is the second time in five years that Alcoa has announced that it would curtail operations at Intalco, and it is deeply distressing that the company chose to make this announcement in the middle of a pandemic,” the lawmakers wrote in the letter. “While we recognize that companies like Alcoa have certain corporate responsibilities, they also have a responsibility to their workers and communities.”
With the pandemic leading to a global economic slowdown that’s created a lot of extra aluminum supply, there’s not much expectation the price for the metal will go up anytime soon.
With the first wave of layoffs expected to hit Intalco around June 21, the clock is ticking to try and find a way to avoid curtailing the facility.
What the workers are doing
The union is working on a couple of strategies to try and save the facility. One is to appeal to the federal government that this is an essential facility that should stay operating in the U.S. The other strategy is to try and find another company to take it over.
So far there’s been a lot of bipartisan support from legislators and offers to help from the community, said Glenn Farmer, business representative for the International Association of Machinists Local 2379 District 160, noting all the #saveIntalco signs that have been popping up around Whatcom County.
“This will take everyone to pull this off,” Farmer said in an interview with The Bellingham Herald on Thursday, May 7.
Appealing to the federal government, or perhaps President Donald Trump himself, and convincing it that aluminum smelters are important to the national security of the country is a tall task, particularly given the current trade war that is coinciding with the pandemic. The resulting economic slowdown has left diminished demand for aluminum, whether it is imported or domestic. The union has reached out to the Trump administration, but as of yet there hasn’t been much traction.
Given the current economic conditions in the industry, Farmer said trying to sell the facility might be difficult to do right now although there are some potential bidders out there. More likely, federal support is needed.
In the meantime, signing petitions and putting up signs to show support is one of the few options left for the community, Farmer said.
