Union workers at Alcoa’s Intalco Works have accepted a contract extension that will provide labor stability through March 2017.
The extension offer was approved late Thursday night, Oct. 15, according to a Facebook post from the International Association of Machinists Local 2379 District 160. The voting took place over several days and was extremely close, said Glenn Farmer, business representative for the union.
The workers had gone into the negotiations with high expectations for changes, including potential wage increases, but recognized that current market conditions made it difficult for the company to offer anything more than an extension. The members opted to go with a shorter 18-month extension with the hope that market conditions will improve.
“This workforce has worked a long time at keeping (Intalco Works) alive,” Farmer said. “The next 18 months will be crucial not only for the next contract negotiations, but for the survival of the plant.”
The extension, which covers about 520 employees at the facility near Ferndale, is a good outcome, said Barry Hullett, Intalco’s plant manager.
“The agreement protects jobs and offers security, which allows us to focus our energy and efforts on meeting the challenges of our businesses and working together to build a better future for our company during this very challenging business environment,” Hullett said in a written statement.
The company and industry are in the midst of change. Near the end of September, Alcoa announced it was splitting into two companies, with the “upstream” company breaking off and focusing on the primary aluminum, alumina and bauxite businesses, while the “downstream” portion of the company would focus on sheet and billet products. Intalco Works will be part of the “upstream” company after the split and retain the Alcoa name, said Raina Clark, a spokeswoman at Intalco Works.
Until the separation is complete, it remains business as usual at Intalco Works, Clark said, adding that she expects the plant to continue to operate in its normal course once the split is complete.
“We are in the early stages and will announce additional details as appropriate as we move through this process,” Clark said.
The industry is going through a challenging time that is impacting the overall company. Aluminum prices have dropped to near six-year lows, according to a recent Bloomberg article, falling to levels that are below production costs at some smelters. While Alcoa has predicted demand for aluminum will grow this year, China has flooded the market in the first seven months of the year, according to data compiled by Bloomberg.
The glut of aluminum, along with the dive in prices, weighed heavily on the minds of members during the union vote, Farmer said.
“Intalco has good workers that make a special product,” he said. “The union looked at this as an opportunity to address some issues and prepare for next time.”