CHICAGO Rio Tinto Alcan Inc. has "let go" of five employees at its Cleveland sales office as it adjusts to having less production capacity in North America, a company spokeswoman said.
The Montreal-based aluminum producer told AMM the cuts were necessary after the sale of its Sebree, Ky.-smelter to Chicago-based Century Aluminum Co. (amm.com, June 3) and the shutdown of its smelter in Shawinigan, Quebec (amm.com, Aug. 7).
"Following the loss of Sebree business as well as the Shawinigan output reduction, Rio Tinto Alcan had to adjust its organization and to right-size its operations in Cleveland," the spokeswoman said in an e-mail to AMM Feb. 28.
The spokeswoman declined to reveal which individuals or positions had been eliminated but stressed that Rio Tinto Alcans Cleveland sales office is "there to stay." Thats especially true given that the company plans to sell more than 1 million tonnes of value-added products in the Americas in 2014, she said.
Market sources said Rio Tinto Alcan made the cuts through layoffs and retirements, with the move affecting territory sales managers and internal sales staff.
Rio Tinto Alcan has already confirmed to AMM plans to reorganize parts of its European and American commercial business units as it aims to streamline and adjust to a smaller footprint in both regions (amm.com, Dec. 6).
The cuts in Cleveland were also tied to Rio Tinto Alcans inability to negotiate a commercial agreement to source product from the plant in 2014 (amm.com, Sept. 23), market sources said. And while the company continues to make billet from its Shawinigan casthouse, it now uses cold-metal feedstock instead of molten metal from a smeltera change that has lessened output from the plant (amm.com, Nov. 20).
The layoffs also come as London-based parent company Rio Tinto Plc is slashing staff as it looks to cut costs (amm.com, Dec. 3), and a portion of the cuts and cost savings are coming from Alcan, market sources said.
While some market sources said they were surprised to learn that sales staff they had worked with were no longer with Rio Tinto Alcan, others said they had expected the move given the company no longer has production facilities in the United States and also has less metal to sell.
"When you have fewer nails to drive, you retire some hammersits that simple," one source said.
The Shawinigan casthouse, which is for sale (amm.com, Jan. 24), has focused production largely on niche, small-diameter billet, market sources said. While sources disagreed over whether the overall billet market was tight, they generally agreed that Rio Tinto Alcan probably wont play as big a role in the spot billet market in early 2014 as it has in the past. Thats not only because of the loss of Sebrees metal but also due to a scheduled 10-day maintenance outage in March at its Arvida smelter in the Saguenay-Lac-Saint-Jean region of Quebec, they said.
Rio Tinto Alcan was underbooked in January, overbooked in February and may be short metal in March as the maintenance outage and weather-related logistical snarlsespecially problems with rail car availabilitymean metal that was pre-produced ahead of the outage has largely been consumed, market sources said.
The spokeswoman did not comment on production or logistics issues.