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Alcoa Inc. said
Tuesday it plans to cut production at a plant in New York, but that
an arrangement with the New York Power Authority will help it avoid
mass layoffs.
Alcoa, the largest
U.S. aluminum producer, has faced sharply lower demand and prices as
the global economic slowdown hits key buyers of the lightweight
metal in the construction, automotive and packaging industries. In
January, the Pittsburgh-based company reported its first quarterly
loss in six years.
Alcoa said it had
planned to curtail production temporarily at its two smelters in
Massena, N.Y. — which make about 255,000 metric tons of aluminum
annually — by about 120,000 metric tons per year starting in May.
That would bring
Alcoa's total production cuts to more than 850,000 metric tons per
year, or about 20 percent of its annualized output.
That action would
have resulted in the elimination of about 1,100 jobs, but Alcoa said
it has reached an agreement with the NYPA that will allow it to
continue operating one of the smelters and retain more than 250 of
the 420 workers at the second smelter.
The agreement
includes a two-year waiver of minimum charges related to power
allocations at one of the smelters, the East Plant. It also
temporarily lowers Alcoa's job commitment threshold to 90 percent,
conforming with NYPA's job commitment requirements of other
industrial companies, and allows Alcoa to make payments to an
economic development fund as projects are approved instead of having
to capitalize the funds in full upfront.
-AP wire reports,
4-1-09
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