Alcoa plans 660 layoffs
By MATTHEW WATKINS
matthew.watkins@theeagle.com
Metal producer Alcoa announced Tuesday that it would shut down its aluminum smelter operations in Rockdale and lay off 660 employees, sending shock waves through a city that has depended on the plant as its main economic driver for decades.
The layoffs are in addition to the 160 people who lost their jobs in recent months as the company reduced production in its 35,000-acre Rockdale plant. In all, 820 full-time employees will be laid off -- about 15 percent of the city's population of 5,439. Between 200 and 400 contractor jobs also will be lost, city officials estimate.
Officials said that they expected the layoffs to ripple through other area businesses that depend on Alcoa employees.
"It will hurt for sure," said Ken Cooke, president of the Rockdale Economic Development Board. "We are kind of at a loss. We have been so dependent on one industry for years."
Alcoa will continue to operate its aluminum atomizer at the plant and employ 140 people, according to a statement released by the company.
A shock to workers
Alcoa first announced layoffs in June when it said it would temporarily release 250 Rockdale employees because of complications caused by an unreliable power supply to its plants. Company officials have complained of repeated power outages from Luminant -- a company under contract to supply power to the Rockdale site -- and filed suit against the supplier last month, accusing Luminant of manipulating prices.
In addition to laying off workers in June, the company cut its smelter operations in half but indicated that it hoped to return to full production once issues with the power supply were resolved. Officials said Tuesday that they would not be able to achieve that goal.
"When we initially curtailed half of our aluminum production in Rockdale, we said it would be extremely challenging to try to be competitive operating only half the plant," said John Thuestad, president of the company's U.S. Primary Products business, in a prepared statement. "Unfortunately, the cumulative effect of operating only half of the smelter, well-known issues regarding the cost and long-term reliability of the power supply in Rockdale, and current market conditions, has forced us to make this difficult decision."
Luminant has denied that energy prices and unreliability from its company prompted the layoffs.
"As a result of Luminant's consistent efforts, there have been no new significant power generation concerns or new pricing issues -- even after Hurricane Ike," Luminant said in a statement released Tuesday afternoon. "We believe Alcoa has a history of using layoffs like this as a vehicle for managing costs and driving the company's profitability. Alcoa should acknowledge its independent decisions instead of blaming power supply issues and unspecified 'market conditions.'"
The first round of job cuts caused unease among workers, but residents said they didn't expect another round to come along so quickly.
"When the first layoffs started happening, I think people thought they would be brought back, and now they are having to change their whole mindset because there will be nothing to be brought back to," said Cindy Jerman, director of the Central Texas Workforce Center's office in Rockdale.
David Edmonds, president of Local 4895 of the United Steelworkers union, said he was called to the office of the Rockdale branch manager Tuesday morning and informed of the cuts. Soon after, managers from across the plant gathered their workers and told them the news, Edmonds said.
"I work with these people every day -- good days and bad days -- and I was pretty saddened by it all," he said. "I became friends with them, and I know the impact it has on them."
Employees probably will be phased out by seniority -- with the most recently hired asked to leave first -- and many who worked more than two years will receive severance, Edmonds said. Negotiations between the union and Alcoa are anticipated next week.
Edmonds said he had worked at the plant for almost 39 years and was unsure whether he would have a job when the dust settled. The 57-year-old said he would consider retiring if he lost his job.
"There's a lot of people waiting, and I am sure that it will be more difficult in the next few days and weeks," he said. "The first day is a shock, and then all of the questions start coming out."
Powerful impact
Alcoa opened its plant in 1952 when Rockdale was primarily an agricultural community of about 2,500 residents. At its peak, the plant produced about 267,000 metric tons of aluminum products a year, including aluminum powder for the NASA space shuttle program and sheet ingot used to make plates, sheets and foil.
Officials said they anticipated that many of the workers would be forced to leave to find other jobs.
"Most people are either going to have to move or commute," said Jerman, the director of the workforce office. "We have never faced anything like that."
The Central Texas Workforce Center worked Tuesday to arrange an emergency job fair that would host employers such as Halliburton and Luminant. Jerman said she had talked to some employers from Brenham that might arrange a van pool to bring workers into town from Rockdale each day.
"This will absolutely change the face of the whole city," she said.
Officials said they anticipated that other businesses will suffer, too, and that retail jobs might be lost. Restaurants, car dealerships and retail stores in the area relied on Alcoa employees for business, officials said.
"Those guys and ladies worked a lot of overtime, make a lot of money and spend a lot of money," said Edmonds, the union leader. "That money is not going to be there, and there is going to be tough sledding for everyone. You look at the restaurants and the Ford place and the Chevrolet place; some will make it, and some will shut down."
Since the first round of layoffs was announced, city leaders had been considering other economic development options, such as allowing the sale of mixed alcoholic drinks in the city to entice bars and restaurants.
Diversifying the economy was tough, however, because potential new businesses were concerned that the plant would close and that the economy would crumble, leaders said.
In addition, leaders expressed frustration with the tools available to the city for economic development. The city allocates no money in its budget for economic incentives, said Cooke, the economic board leader.
"You can't recruit businesses without money," he said. "There just aren't a lot of industrial jobs opening up. I would imagine we will become something of a bedroom community, and if someone finds a job in Austin you can still live in Rockdale and commute."
matthew.watkins@theeagle.com
Metal producer Alcoa announced Tuesday that it would shut down its aluminum smelter operations in Rockdale and lay off 660 employees, sending shock waves through a city that has depended on the plant as its main economic driver for decades.
The layoffs are in addition to the 160 people who lost their jobs in recent months as the company reduced production in its 35,000-acre Rockdale plant. In all, 820 full-time employees will be laid off -- about 15 percent of the city's population of 5,439. Between 200 and 400 contractor jobs also will be lost, city officials estimate.
Officials said that they expected the layoffs to ripple through other area businesses that depend on Alcoa employees.
"It will hurt for sure," said Ken Cooke, president of the Rockdale Economic Development Board. "We are kind of at a loss. We have been so dependent on one industry for years."
Alcoa will continue to operate its aluminum atomizer at the plant and employ 140 people, according to a statement released by the company.
A shock to workers
Alcoa first announced layoffs in June when it said it would temporarily release 250 Rockdale employees because of complications caused by an unreliable power supply to its plants. Company officials have complained of repeated power outages from Luminant -- a company under contract to supply power to the Rockdale site -- and filed suit against the supplier last month, accusing Luminant of manipulating prices.
In addition to laying off workers in June, the company cut its smelter operations in half but indicated that it hoped to return to full production once issues with the power supply were resolved. Officials said Tuesday that they would not be able to achieve that goal.
"When we initially curtailed half of our aluminum production in Rockdale, we said it would be extremely challenging to try to be competitive operating only half the plant," said John Thuestad, president of the company's U.S. Primary Products business, in a prepared statement. "Unfortunately, the cumulative effect of operating only half of the smelter, well-known issues regarding the cost and long-term reliability of the power supply in Rockdale, and current market conditions, has forced us to make this difficult decision."
Luminant has denied that energy prices and unreliability from its company prompted the layoffs.
"As a result of Luminant's consistent efforts, there have been no new significant power generation concerns or new pricing issues -- even after Hurricane Ike," Luminant said in a statement released Tuesday afternoon. "We believe Alcoa has a history of using layoffs like this as a vehicle for managing costs and driving the company's profitability. Alcoa should acknowledge its independent decisions instead of blaming power supply issues and unspecified 'market conditions.'"
The first round of job cuts caused unease among workers, but residents said they didn't expect another round to come along so quickly.
"When the first layoffs started happening, I think people thought they would be brought back, and now they are having to change their whole mindset because there will be nothing to be brought back to," said Cindy Jerman, director of the Central Texas Workforce Center's office in Rockdale.
David Edmonds, president of Local 4895 of the United Steelworkers union, said he was called to the office of the Rockdale branch manager Tuesday morning and informed of the cuts. Soon after, managers from across the plant gathered their workers and told them the news, Edmonds said.
"I work with these people every day -- good days and bad days -- and I was pretty saddened by it all," he said. "I became friends with them, and I know the impact it has on them."
Employees probably will be phased out by seniority -- with the most recently hired asked to leave first -- and many who worked more than two years will receive severance, Edmonds said. Negotiations between the union and Alcoa are anticipated next week.
Edmonds said he had worked at the plant for almost 39 years and was unsure whether he would have a job when the dust settled. The 57-year-old said he would consider retiring if he lost his job.
"There's a lot of people waiting, and I am sure that it will be more difficult in the next few days and weeks," he said. "The first day is a shock, and then all of the questions start coming out."
Powerful impact
Alcoa opened its plant in 1952 when Rockdale was primarily an agricultural community of about 2,500 residents. At its peak, the plant produced about 267,000 metric tons of aluminum products a year, including aluminum powder for the NASA space shuttle program and sheet ingot used to make plates, sheets and foil.
Officials said they anticipated that many of the workers would be forced to leave to find other jobs.
"Most people are either going to have to move or commute," said Jerman, the director of the workforce office. "We have never faced anything like that."
The Central Texas Workforce Center worked Tuesday to arrange an emergency job fair that would host employers such as Halliburton and Luminant. Jerman said she had talked to some employers from Brenham that might arrange a van pool to bring workers into town from Rockdale each day.
"This will absolutely change the face of the whole city," she said.
Officials said they anticipated that other businesses will suffer, too, and that retail jobs might be lost. Restaurants, car dealerships and retail stores in the area relied on Alcoa employees for business, officials said.
"Those guys and ladies worked a lot of overtime, make a lot of money and spend a lot of money," said Edmonds, the union leader. "That money is not going to be there, and there is going to be tough sledding for everyone. You look at the restaurants and the Ford place and the Chevrolet place; some will make it, and some will shut down."
Since the first round of layoffs was announced, city leaders had been considering other economic development options, such as allowing the sale of mixed alcoholic drinks in the city to entice bars and restaurants.
Diversifying the economy was tough, however, because potential new businesses were concerned that the plant would close and that the economy would crumble, leaders said.
In addition, leaders expressed frustration with the tools available to the city for economic development. The city allocates no money in its budget for economic incentives, said Cooke, the economic board leader.
"You can't recruit businesses without money," he said. "There just aren't a lot of industrial jobs opening up. I would imagine we will become something of a bedroom community, and if someone finds a job in Austin you can still live in Rockdale and commute."
