High power prices lead to layoffs at Columbia Falls Aluminum

The list of 124 hourly workers to be laid off at Columbia Falls Aluminum Co. starting July 21 was posted in the plant late last week.

Although the people named on the list are pretty certain of losing their jobs - at least for now - the official list will be finalized and posted either today or Wednesday, depending on the final numbers from Glencore AG, the Swiss-based company that owns the plant.

That's the word from Dave Toavs, the new president of the Aluminum Workers Trades Council.

"We're hoping it's not a long layoff like the last one. Some of those people were off just a hair over three years, 37 or 38 months," Toavs said, referring to the three-year mass layoff that started in 2003. "But we have reason to be hopeful this won't be so long."

He said the majority of workers on the layoff list have been with CFAC for 12 to 15 months.

Soaring power prices were the main reason that CFAC officials announced a curtailment in aluminum production at the plant this spring, prompting a 60-day notice of pending layoffs on May 21. Electric power is the largest cost input at any aluminum smelter.

"With the time of year now," Toavs said, "this is the highest price of power, when the demand goes up. But after the first of the year it cools off and the price could go down. We're not saying it's going to happen but we're optimistic. I don't have a crystal ball, but that's what we're hoping."

CFAC Manager of External Affairs Haley Beaudry was more cautious on sharing that overt optimism about whether the jobs will come back.

"If you take a look at the power markets today, they're way ahead of where we would expect them," he said.

Beaudry said power prices in May, when the layoff decision was made, had been predicted to be near $100 per megawatt hour by August.

But one quote on Monday morning put national markets at $110, a month ahead of projections - driven in large part by extreme demands from California's hot, dry early summer.

Aluminum prices on the global market, at $1.40 a pound Monday, were 20 cents higher than in late May. But even that is not enough to counteract the surge in electricity costs.

For now, Beaudry said one pot line will be shutting down at the Columbia Falls plant. He cannot speak to whether further shutdowns are on the horizon.

The 60-day notification period ends on July 20, and the first layoffs will begin on July 21. As the shutdown progresses, more hourly workers will be laid off.

"The plan right now is to be through the layoff list by July 31," he said.

"Other announcements will follow," he said - announcements of salaried workers to be laid off later. The human resources office, senior management and the board of directors were working on that list Monday afternoon.

Beaudry said one pot line can translate to anywhere between 120 and 160 jobs, depending on how many lines are in production and sharing common workers.

He said he contacted Montana's Congressional delegation and the Montana Department of Labor and Industry, asking for help in obtaining training grants and other assistance that might be available for workers.

"And frankly, they're very good at providing it," he said.

Toavs, who has 29 years at the plant, said those training grants would be important to laid-off workers looking for another income as they face an uncertain future at the plant. Twenty-six weeks of unemployment benefits is the only other safety net.

The union contract offers no severance pay but it does give job-recall rights, based on seniority, for three years. But after three years all workers lose their recall rights.

"When they fired up after the last shut down, it was the first time in the history of the plant that we had that long of a layoff," the union president said of the three-year shutdown. "So this is new ground. Those people lost their seniority, but they still gave them a chance to come back first."

Some, however, already had moved on to other work and didn't return to the aluminum plant.

Beaudry acknowledged the payroll impact will be significant to families across the valley, and admitted he struggles with those implications.

"But the level of the payroll is not and has never been the driving factor," he said. "It is big. I don't know how many hourly people are here now, but we're talking in the neighborhood of 40 to 50 percent of them being laid off."

"All I can say is I hate to see these layoffs," Toavs said.

"I've been out here 29 years now and I have seen several … It's scary for the people, they don't know what the future holds. They have families to feed, and unemployment is not that much. This is a bad time (to be out of work) - construction is winding down," he said of a backup plan for some workers in the past.

"Hopefully, they'll come up with lower power prices by next spring."

Reporter Nancy Kimball can be reached at 758-4483 or by e-mail at nkimball@dailyinterlake.com