potlines at bankrupt aluminum producer Ormet Corp.s
smelter in Hannibal, Ohio, will be shut down by Oct. 11 at the
latest, according to a United Steelworkers union official.
Ormet said late last
week that it could not emerge from bankruptcy protection after
failing to secure a more favorable power rate from Ohio
regulators and that it would have to shut down its Hannibal
amm.com, Oct. 4).
The aluminum producer
had been operating two of its six potlines in Hannibal earlier
this year but these are now expected to be shut down as soon as
Oct. 9, said John Puskar, a staff representative for USW
District 1, which represents workers in Ohio.
"If things go OK they
will probably shut down on (Oct. 9) or (Oct. 10). If things do
not go according to plan, it will be (Oct. 10) or (Oct. 11),"
Puskar said in an e-mail to AMM Oct. 4.
Ormet must employ
about 650 people according to its power agreement, Puskar said.
The company generally employs roughly 1,000 workers when all
six lines are running, he said.
The union expects
"mass layoffs" with no potlines in operation, Puskar said,
adding that a skeleton crew may be working but staffing levels
on that crew were not immediately clear, he said.
meanwhile, blasted the Public Utilities Commission of Ohio
(PUCO) for not granting Ormet, also based in Hannibal, all of
the rate relief it had requested.
PUCO denied most of
Ormets proposed energy transition plan, which would have
allowed the company to construct its own natural gas power
plant, Ohio state Rep. Jack Cera and state Sen. Lou Gentile
said in a statement Oct. 5.
Thousands of jobs are
now in jeopardy and the region around Hannibal is concerned
about the stability of its local governments and school systems
that rely on Ormets tax base, Cera said. "I am extremely
disappointed in the recent decision by the PUCO to only grant
part of Ormets request for temporary rate relief," Cera
said. "I will continue to impress upon state regulators the
importance of protecting these jobs."
Gentile said Ormet
workers and retirees had already made deep concessions in wages
and benefits to put the company in a position to succeed. "The
workers, families and communities in the Ohio (River) Valley
deserve better," he said. "Everyone is concerned about the
impact this will have on the economy in eastern Ohio."
Ormet had sought a
fixed power rate and permission to break an agreement with
Columbus, Ohio-based utility American Electric Power Co. (AEP),
which runs through 2018.
PUCO granted the
company a fixed rate, albeit one higher than the aluminum
producer had hoped for, but denied its request to break its
pact with AEP.
Ormet filed for
bankruptcy protection in February citing legacy costs, power
costs and low aluminum prices (
amm.com, Feb. 26). The company was sold to Smelter
Acquisition LLC, a subsidiary of Wayzata (Minn.) Investment
amm.com, June 4). But the closing of that
transaction hinged on Ormet obtaining a better power deal (
amm.com, Sept. 30).
The Hannibal smelter has annual capacity of 270,000 tonnes
but had been operating the two potlines at a rate of only
90,000 tonnes per year while losses at the company continued to
amm.com, Sept. 23).