- Plant employs 600 people and has 130,000 tons of capacity
- Company will continue with other announced curtailments
Alcoa Inc., the biggest U.S. aluminum producer, brokered an eleventh-hour reprieve for 600 workers at its Massena smelter complex.
The New York-based producer entered into a three-and-a-half year deal with New York state to keep its Massena West smelter open, it said in a statement Tuesday. With capacity of 130,000 metric tons, the plant will get about $70 million in assistance with capital and operating expenses, including power.
On Nov. 2, Alcoa said it would shutter one of two smelters in Massena and idle another in the town. The company, which plans to separate its metal-making business from its manufacturing units, will continue with other announced curtailments amid a supply glut. Alcoa’s state assistance package comes as peer Century Aluminum Co. steps up efforts to raise visibility of subsidies paid to producers of the metal in China.
“This plant is going to keep operating the way it has been operating for over 100 years,” New York Governor Andrew Cuomo said from an event at Massena.
Alcoa will be penalized if the headcount falls below 600 before March 2019 and the level of assistance will drop if the price of aluminum rises.
Alcoa shares rose 0.3 percent to $9.10 at 12:28 p.m. in New York. The shares jumped 4.4 percent on Monday after billionaire Paul Singer’s Elliott Management Corp. announced it bought a stake in the company, endorsing Chief Executive Officer Klaus Kleinfeld’s separation plan.
Aluminum, up 0.9 percent in London on Tuesday, has slumped 22 percent this year, heading for its biggest rout since 2008.
“If the price of aluminum is up, it will take care of itself,” U.S. Senator Chuck Schumer said at the event. “If the price of aluminum is down, we’ll be back here.”