Alcoa set to close Point Henry smelter plant
Alcoa announces it will shut its Point Henry aluminium smelter and two rolling mills, costing a total of 980 jobs.PT1M16S http://www.canberratimes.com.au/action/externalEmbeddedPlayer?id=d-32xb1 620 349 February 18, 2014
Alcoa has announced that it will shut its Point Henry aluminium smelter and two rolling mills, costing a total of 980 jobs.
Alcoa said the smelter, where 500 workers are employed, would cease operation in August.
Alcoa has announced it is closing its aluminium smelter in Port Henry. Photo: Joe Armao
Additionally, a Geelong rolling mill along with a rolling mill and recycling centre at Yennora in Sydney would close by the end of the year with the loss of a further 180 jobs.
The closure moves the contraction of the Australian aluminium smelting industry up another notch.
The 50-year-old smelter had no prospect of becoming economically viable, the company said in a statement.
The announcement is the latest in a series of job losses in the manufacturing sector, following on from decisions by Toyota and Holden to pull out of their manufacturing operations in Australia.
"We recognise how deeply this decision impacts employees at the affected facilities and are committed to supporting them through this transition," Alcoa chief executive officer Klaus Kleinfeld said.
"Despite the hard more of the local teams, these assets are no longer competitive and are not financially sustainable today or into the future."
The Point Henry smelter faced global issues that could not be influenced by state government support, Victorian Premier Dr Denis Napthine said.
Dr Napthine told Fairfax Radio, 3AW he had spoken to Alcoa of Australia’s managing director Alan Cransberg and had been told the state government could not influence the decision to close the Point Henry smelter and the rolling mills in Geelong.
‘‘I was told that there was nothing further the state government could do,’’ Dr Napthine said.
‘‘That these are world issues that are beyond the capacity of state governments,’’ he said.
Dr Napthine said the government through its Geelong Industry Fund was promoting employment in the region but it was primarily Alcoa’s responsibility to assist its own workers. He said the company had a ‘‘good record’’ for ‘‘looking’’ after its workers.
Geelong Mayor Darryn Lyons said it was an horrific day and ''another kick in the teeth'' for the city.
He said he held concerns about redundancy entitlements and opportunities for workers to retrain, and called on the federal government to help.
''It's not only about the 600 or 700 jobs that are going here, there's a lot of supply chain jobs going as well ... we need emergency funding and we need it now,'' he said.
''This is a devastating day.''
Mr Cransberg told media a final decision was made at a board meeting Tuesday morning.
He said the smelter was no longer competitive because of the high Australian dollar, low commodity prices and lack of reinvestment in the facility.
"It's tough. People were sort of expecting the announcement but there's still a shock when the announcement comes," Mr Cransberg said.
"This is a horrible day.
"These are big decisions to make and I and the company understand how difficult it is for our employees, their families, our contractors and our many community partners."
The Alcoa managing director said the company "remains very committed to Australia".
"Our operations in Western Australia are amongst the best in the world anid we will do all we can to ensure our remaining facilities... remain sustainable in the future."
The Gillard Labor government gave the smelter financial assistance to ensure it continued to operate beyond the last federal election and its closure, once that assistance finished, was widely expected.
It follows the closure earlier of the Kurri Kurri smelter which was located in the Hunter valley, in NSW.
Opposition Leader Daniel Andrews said Victoria was in the grip of a job crisis.
"Our biggest companies are closing their doors while Denis Napthine stands by and does nothing,'' Mr Andrews said.
"Ford, Holden, Toyota and now Alcoa. How many thousands of jobs will have to go before Denis Napthine realises he needs to get a jobs plan?
Alcoa’s smelter in Portland, Victoria, and its bauxite and alumina refining operations in Western Australia, will continue to operate.
The closure would result in a $250 million post tax charge being booked, of which the ASX-listed Alumina's share would be 40 per cent, in line with its shareholding in the smelter.
The smelter will cut Alcoa's aluminium output by 190,000 tonnes.
Australian Workers Union state secretary Ben Davis said the situation in Geelong, with 800 job losses at Alcoa, was now as bad as the Latrobe Valley when the State Electricity Commission was privatised and Newcastle when BHP pulled out, given there already significant job losses at Ford, Boral, Target and Qantas at Avalon.
He warned there would be social dislocation with people set to lose their houses and relationships breaking down because of the stress of unemployment.
‘‘These people will not be able to find manufacturing jobs in Geelong, or any job for that matter,’’ Mr Davis said.
‘‘We don’t want Geelong to end up like the Latrobe Valley and Newcastle were,’’ he said.
‘‘It’s hard to over egg the omelette, it’s that bad, it’s quite possible Geelong will go into recession.’’
Liberal MP for Corangamite Sarah Henderson said the company should have given workers more notice.
''Frankly to close the smelter in August is not good enough,'' she said.
AMWU New South Wales Secretary Tim Ayres said: "This is the next wave of blue-collar job losses in western Sydney. There have been jobs flowing out of the Toyota and Holden decisions and a series of closures over the last few months," Mr Ayres said.
He said the firm is the only aluminium recycler in NSW, churning through 55,000 tonnes of scrap metal each year.
"What this means about NSW is it puts a question mark over whether we can recycle aluminium," Mr Ayres said. "Recycling uses 5 per cent of the energy needed to produce aluminium. All of our scrap aluminimun will have to be exported."
Mr Ayres said the Abbott and O'Farrell governments had shown "hostile indifference" to the plight of manufacturing workers, which was creating a "jobs crisis in NSW and particularly in Western Sydney".
with Anna Patty