Alcoa smelter closure will cost 325 jobs
Seattle Times business reporter
None of that mattered yesterday as Alcoa, the nation's largest aluminum producer, announced that on Oct. 1 it will close Northwest Alloys, its magnesium smelter in Addy, Stevens County, 70 miles north of Spokane.
Alcoa executives from New York and Western Washington traveled to Addy, population 500, yesterday to deliver the news personally. Plant managers and executives met with government and civic leaders to tell them of the company's plans and to promise to continue to support local charities for at least the next year.
There had been rumors for months the plant would close, but yesterday it was hard to tell who was more shocked by the announcement - the Alcoa workers or the communities that had come to rely on the $19 million annual payroll and the company's civic generosity.
"They have been really good as far as what they've supported in this community," said Stevens County Commissioner Malcolm Friedman. "They support everything. That's what really makes it hard. There's no good news here."
Alcoa told employees they will get a paycheck through September, and that the company will do everything it can to find them work within the company. A small group of employees is expected to stay on until December.
About 70 percent of Northwest Alloys employees are 40 or older, so many are expected to qualify for early retirement packages.
The plant is next to a dolomite deposit and has produced magnesium for Alcoa since it was built in 1975. Wilkinson said the process the plant uses is inefficient and can't compete with producers in China, Russia and Israel.
While a dramatic increase in the price of electricity has resulted in the shutdown of aluminum smelters in the region, Wilkinson said that wasn't what caused this closure.
"The increase in power costs wasn't good for the business, but the main reason for the plant shutdown was market conditions," said Wilkinson. "We are a high-cost producer of magnesium and the market is at a low ebb. The combination of the two resulted in Alcoa being able to go out and purchase magnesium for a long period of time at a significantly lower price than we could make it."
Wilkinson said the company will maintain the plant in operational condition for several years in case market conditions change, but said he doesn't anticipate the plant will ever reopen.
That is bad news for employees and for Stevens County, where unemployment is at 12 percent.
With 325 employees, Alcoa was about the biggest employer in one of the poorest counties in the state. Friedman said there is nowhere in the immediate area where Northwest Alloys employees will find comparable work and pay.
Robert T. Nelson can be reached at 206-464-2996.