News / USA

    Historic Aluminum Smelting Industry in Rapid Decline in US

    Alcoa smelter workers commiserate at their union hall in East Wenatchee, Washington; from left Kelley Woodard, Kirk Peterson, Clayton Verellen and Chris Morales, Jan. 20, 2016. (T. Banse/VOA)
    Alcoa smelter workers commiserate at their union hall in East Wenatchee, Washington; from left Kelley Woodard, Kirk Peterson, Clayton Verellen and Chris Morales, Jan. 20, 2016. (T. Banse/VOA)
    Tom Banse

    Smelter worker Chris Morales of Wenatchee, Washington, remembers the day he learned he was being laid off - via a text message on a day off. "It is a feeling of surprise, panic," he said. "Now what? My wife has a good job; I'm fortunate for that. But still, I was counting on Alcoa, which has been around for years."

    Sixty-four years here in Wenatchee, in fact. The American company now known as Alcoa was the first to commercialize aluminum production more than 100 years ago. That industry eventually employed tens of thousands of workers around the US. But aluminum smelting is now in steep decline domestically, and while Alcoa insists it will still make aluminum in the Pacific Northwest, many laid-off workers, like Morales, have doubts. He recalled the advice he got from plant managers: "something along the lines of, 'You need to go find another job.'"

    So he is moving on, hoping service as a volunteer firefighter will turn into a career position.

    Alcoa's Wenatchee Works shut down indefinitely at the beginning of January, Jan. 20, 2016. (T. Banse/VOA)
    Alcoa's Wenatchee Works shut down indefinitely at the beginning of January, Jan. 20, 2016. (T. Banse/VOA)

    Hundreds of jobs lost

    The idling of the Alcoa Wenatchee smelter at the beginning of January cost around 420 jobs, which paid around double the average wage of that area. Another 465 workers at another Alcoa smelter outside Ferndale, Washington, are worried.

    Plant manager Barry Hullett explained the situation at a hearing before state Senators. "It is important to notice the difference between a curtailment and a closure. When we curtail a plant, we keep it in operating condition so it may be restarted. That's different than a closure." He noted that what the remaining Pacific Northwest smelters face is indefinite curtailment.

    Hullett hopes market conditions "will change for the better." But the price for aluminum fell around 30 percent last year. "The metal price shouldn't stay at this level," he said. "It's at historic lows. So commodity cycles should change. Hopefully when that does, we'll be positioned to keep operations going in Washington state."

    FILE - Alcoa's Intalco Works smelter near Ferndale, Washington, which continues to operate for now, Apr. 29, 2008. (Tore Oftness via Alcoa)
    FILE - Alcoa's Intalco Works smelter near Ferndale, Washington, which continues to operate for now, Apr. 29, 2008. (Tore Oftness via Alcoa)

    Growing international competition

    Fifteen years ago, there were 23 active aluminum smelters in the U.S. Today there are only six - including that one in Ferndale - and by mid-year, there could be fewer after scheduled closures.

    Karen McBeth follows aluminum's fortunes for the industry news service Platts. She says U.S. firms face tough competition from newer smelters in China and other countries."It's interesting how China has just completely overtaken the industry," she said. "It is true of a lot of metals markets, not just aluminum.  They now account for about half of global production and half of global demand. So they are a huge factor."

    McBeth is rooting for a U.S. comeback, but not counting on it. "At the moment though, a number of these smelters are being dismantled. It is going to be a little late for the U.S. industry to try to make a comeback if the price doesn't improve soon."

    She notes that aluminum production is very energy intensive, so any revival might also require favorable power deals. New York State just reached a subsidy deal to keep the northeast's only remaining smelter in operation for three more years.

    Back in Washington state, longtime smelter worker Kelley Woodard says losing metal production hurts U.S. strategic interests.

    "I'm not a big fan of government supplying a lot of money to corporations," he admitted. "But I, as a citizen, think it is vital to keep some type of aluminum production in the U.S. I am hoping, hoping a lot, that the Northwest can maybe keep a couple smelters around."

    The Chicago-based Century Aluminum Company and the United Steelworkers Union are lobbying for trade sanctions against Chinese aluminum exports. The U.S. Labor Department approved special retraining and dislocated worker benefits recently, agreeing that American aluminum industry workers have been harmed by foreign trade.

     
    What are they doing now?  

    Clayton Verellen, age 33
    Alcoa Wenatchee smelter worker for five years, pot tender
    Family: Married with two kids, ages 8 and 1.
    “I liked being a pot tender,” Verellen said about his job in the heart of the smelter. He had ownership over a section and could see the fruits of his work. “If you did good, you saw the benefits right away. If you did bad, you saw the consequences generally right away too.”
    What next: Verellen is coaching his son’s ski racing team this winter and reconnecting with family, before going back to school in spring for a course of study to be determined.

    Chris Morales, age 39
    Alcoa Wenatchee smelter worker for five years, mostly fixing furnaces.
    Family: Married with three little girls.
    "The job is far from glamorous," said Morales. He will miss the camaraderie. "What I enjoyed was the relationship I built with my crewmembers. You learn to rely on people to get work done."
    What next: Hoping to be hired as a career firefighter in Douglas County after serving many years as a volunteer with a county fire district.

    Kirk Peterson, age 46
    Alcoa Wenatchee smelter worker for 18 years, electrician.
    Family: Divorced, two young kids.
    "I loved what I did," said Peterson about his time at the smelter. "It wasn't a total shock," to learn the plant would be idled. "We had heard that we were losing three, four or five million dollars a month. We all kind of thought in the back of our minds that at some point they got to cut the bleeding," Peterson recalled. "It was still a surreal feeling."
    What next: Peterson's electrician skills are transferable, but he is not thrilled about the likely need to travel to far-flung job sites.

    Kelley Woodard, age 56
    Alcoa Wenatchee smelter worker for 32½ years, equipment operator
    President, Wenatchee Aluminum Trades Council.
    Family: Married with one son in college and one other grown son
    "I've seen it all, been there a long time," said Woodard. This is turning out differently than past down cycles, though. "We would have our low times. We'd curtail, but then it wouldn't be as bad as what everybody predicted and we would come back. So I was having hope that somehow this would be like that. It would be rough, but we would get through it somehow."
    What next: Woodard still reports to work as part of a skeleton crew that monitors and maintains vital systems at the Wenatchee smelter. He does not know how long this unexpected extension in his job will last, but hopes to get "at least one more year" in before taking retirement.

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    Comments
         
    by: Gumby from: Bay Area
    February 23, 2016 12:46 PM
    While America is very busy with shutting down coal fired powerplants , China just went ahead and triple coal consumption and is now using five times as much coal as Americans do here.. This is how China achieve over half of global production on aluminium. We are too happy to have Chinese aluminium , anyway.. and pretending to believe in global cimate change.. which may not be what it is all cracked up to be..

    by: Don Simon from: US
    February 23, 2016 11:43 AM
    Aluminum is a specialty metal that does not fit all applications. It is rapidly being replaced in many areas but custom designed composites which are higher performing and specialized plastics . It may be that the metal has had its day.
    In Response

    by: Gumby from: Bay Area
    February 24, 2016 2:20 PM
    Don, you are not really following aluminium because demand is growing fast but China managed to leap ahead of demand growth as if by miracle or something.. Actually, China built so many coal fired powerplants and alum smelters that should make every environmentalist cry so hard.. The industries that consumes aluminium to make a long list of different products must have something to do with fanning China to do so in order to push prices so artificially low ...in case, you haven't seen some media clips of polluted air in China and you haven't figured out where the heck it comes from.... coal ! China does not need to overproduce aluminium but it is still doing so.. This is a conspiracy or other things... I am not sure whether aluminium has had its day and making way for composites on the way.. After all, we are producing well over 100 billion pounds of aluminium every year globally.. This is a tall order ..
    indeed!
    if aluminium prices had doubled, we will be talking about finding an extra 70 billion dollars just for the raw aluminium not to mention mark ups in finshed products.. This is why consumers are after aluminium right now for its artificially low prices powered with coal if nothing else..

    by: Ricardo from: Brazil
    February 23, 2016 8:56 AM
    Aluminum is one of the most noble metals of the earth, and to the United States is also a case of national security. Aluminium is essential in the production of vehicles, aircraft, ships and equipment used by the U.S Army.

    There are two ways to preserve the US aluminum production, the first is to increase the aluminum import tax. The second is to convince Alcoa to invest in the production of electricity.

    Most of the aluminum smelting cost comes from the cost of electricity to melt the metal, .So if Alcoa is self-sufficient in energy she offer their products at a more competitive price.

    by: williweb from: Phoenix Arizona USA
    February 23, 2016 7:54 AM
    Even during the significant economic downturn in China, the US and the world in general, China continues to bleed jobs from the US. These critical industries must be kept on "life support" by the government in hopes of better times ahead. Trump 2016
    In Response

    by: Gumby from: Bay Area
    February 25, 2016 8:00 PM
    Lou, just because China doesn't have EPA, it doesn't mean that we can just exploit Mother Earth for that... This tells me that we lack self restraints as far as global climate change goes.. We just went ahead and seize opportunities whatever it means..Had China practiced environmentalism and produce aluminium "cleanly, the global demand will vanish , anyway.. We flood the markets with aluminium and get flooded with frequent bad storms as well.
    In Response

    by: Gumby from: Bay Area
    February 25, 2016 4:49 PM
    Aluminium is supposed to be relatively scarce due to energy intensiveness required to produce this metal. Prices are supposed to be above $2 but we obviously encourage china to use coal to produce very cheap aluminum we crave in order to forget that it is gong to make global climate change much worse. We are window dressing this issue here while China is choking in smog!
    In Response

    by: Lou from: Atlanta
    February 23, 2016 8:48 AM
    China doesn't have an EPA that American businesses have to deal with.

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