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USW awaits layoffs as Ormet shutdown nears

Keywords: Tags  Ormet, shutdown, Hannibal, Ohio, John Puskar, USW, Rep. Jack Cera, Sen. Lou Gentile American Electric Power


CHICAGO — All 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 smelter (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.

State politicians, 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 Ormet’s 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 Ormet’s tax base, Cera said. "I am extremely disappointed in the recent decision by the PUCO to only grant part of Ormet’s 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 Partners (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 mount (amm.com, Sept. 23).


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