Alcoa announces curtailment of Ferndale operations
Wednesday, April 29, 2020
After 54 years of operation, Alcoa announces they will shutter their smelter near Ferndale, laying off about 700 workers. The aluminum producer said it expects to fully curtail the Intalco Works smelter by the end of July.
Since the beginning of the year, aluminum prices have fallen more than 20 percent, down 45 percent from highs in 2018. In the first quarter of 2020, the Intalco smelter lost $24 million, the company announced in a press release.
“While our employees have worked diligently to improve the facility, the smelter is uncompetitive, and current market conditions have exacerbated the facility’s challenges,” Alcoa President and CEO Roy Harvey said. “This is difficult because of the impact on our employees, and we will ensure appropriate support as we work to safely curtail the facility.”
Steve Emig, Intalco’s plant manager, said the site’s approximately 700 employees have worked together to address numerous challenges in an attempt to make the site competitive in the global market.
“Unfortunately, we cannot control the larger market dynamics,” Emig said. “While this is a sad day, I remain proud of our Intalco team. We will work together during this difficult transition, focusing on safety and providing all available support to our employees.”
“This news is simply heartbreaking,” Ferndale Mayor Greg Hansen said in a statement. “The smelter is part of the lifeblood of our community, and they have been putting food on the tables of Ferndale families for almost three generations. This closure will be a critical blow to our local economy in the midst of a difficult time.”
The potential impacts to Ferndale schools and families may be enormous with the loss of operating revenues from Intalco.
“There is no other way to say this—I am devastated for my community,” Ferndale School District Superintendent Dr. Linda Quinn said. “Mayor Greg Hansen has committed resources and support from the City of Ferndale and I join him in committing the resources of our school district as we come alongside our students and families who are in crisis because of this shutdown.”
The school district is working to develop a plan of support for families who need counseling and other resources.
Commenting on the announced closure, Gov. Jay Inslee stressed the state’s commitment to protect manufacturing jobs.
“Washington state has an established infrastructure that allows companies like Intalco to be as competitive as possible,” Inslee said, “and in 2016 we worked with Intalco executives and federal officials to secure a deal that kept the company operational until now. That deal included some of the lowest energy prices in the nation, a tax preference extension.”
The company has struggled to find equilibrium in an uncertain energy market through a series of contracts with Bonneville Power Administration, which has kept the smelter operating at reduced capacity for the past decade.
Intalco, established in 1966, has 279,000 metric tons of annual peak operating capacity. More than 49,000 metric tons of production capacity was lost due to instability in energy markets.
In 2016, the Canadian producer Petrogas Energy Corp. purchased Alcoa Intalco’s idle wharf and pier for $122 million as the aluminum company continued to scale back shipping operations.
Local leaders pledged to explore avenues that might continue industrial operations at Intalco.
Sen. Doug Ericksen noted that there are only seven aluminum smelters left in the United States, while China has 140.
“We have to bring American jobs home, but before we do that, we have got to keep the American jobs we have here right now, producing the materials that we need in this country,” the Ferndale Republican said at a rally for Alcoa workers last week.
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