This contract is another step in reopening Whatcom’s aluminum smelter
A machinist union has agreed to a five-year contract with the company that is trying to restart the Intalco Works aluminum smelter near Ferndale, but getting a power deal remains a huge hurdle.
The International Association of Machinists and Aerospace Workers Local 2379 announced on Thursday, May 19, that members who could be rehired to the facility if there is a restart overwhelmingly approved the collective bargaining agreement with Blue Wolf Capital Partners. The agreement builds on the previous collective bargaining agreement with improvements to wages and benefits, quarterly bonuses and job protections, according to a news release from the union.
Along with agreeing to a contract similar to what workers had with Alcoa that added more compensation, it also includes an employee equity program, which would give workers some compensation if Blue Wolf sells the operation, said Luke Ackerson, business representative for IAMAW District 160.
“This is important because it shows that Blue Wolf is not only committed to their investors, they are also committed to the employees,” Ackerson said in an email.
Negotiations between Blue Wolf Capital and Bonneville Power Administration for a new power contract are ongoing, but no new developments have taken place, at least from BPA’s side, said Doug Johnson, a senior spokesperson for the agency. Blue Wolf has not commented while negotiations are happening.
Earlier this year BPA’s stance was that it would consider long-term power service within the statutes under which the agency operates, which was lower quantities than what is needed to fully power the smelter. In the past, the Intalco facility needed around 400 megawatts of power to run its three potlines.
In past power agreements, Alcoa would agree to less power and either run Intalco at less than full capacity or buy extra power it needed on the spot market. Given the volatility in the global energy markets, the spot market would potentially be a very expensive alternative for Blue Wolf.
Ackerson, who is not directly involved in the negotiations, said his sense is that BPA has taken a position and they aren’t moving from that position.
“I believe they see more value in charging higher rates to customers outside of the region, and customers with deep pockets, that provide less value to the community and the nation as a whole,” Ackerson said in an email.
While down from earlier this spring, aluminum prices continue to look attractive for smelter operators. According to the London Metal Exchange, the price for aluminum is around $2,800 a metric ton. When Intalco shut down in the summer of 2020, the price was around $1,600 a ton. The closure nearly two years ago cost Whatcom County around 700 manufacturing jobs.
In the meantime there’s been a fair amount of lobbying happening from a variety of groups, urging BPA to reach a power agreement because it could lead to hundreds of living-wage jobs in what would be a more environmentally friendly facility than when it previously operated. About $10 million of the environmental improvements would come from Washington state.
Along with union members, state and federal legislators as well as the city of Ferndale have sent messages to the BPA in favor of an energy deal.
Again, while he’s not directly involved in the negotiations, the union’s Ackerson believes there’s a limited amount of time for a deal between BPA and Blue Wolf to happen.
“I can’t imagine a scenario where any company would continue to fund a project like this without some indication that they could reach an agreement with BPA,” Ackerson said. “I believe we are down to a very short window of opportunity and we need all of the support we can get.”
