FOR IMMEDIATE RELEASE
NYPA, ALCOA PARTNER TO SAVE HUNDREDS OF JOBS AT MASSENA, NY
OPERATIONS DESPITE MAJOR PRODUCTION CURTAILMENT
New York, NY – March 31, 2009 -- In an innovative example of a private corporation
and a public entity partnering to retain jobs during the economic downturn, the New York
Power Authority (NYPA) and Alcoa, the N.Y.-based aluminum company, today
announced they have reached an agreement that will save hundreds of jobs at Alcoa’s
smelters in Massena, New York in the near-term and preserve hundreds more under its
planned long-term modernization project at the plant.
Alcoa operates two smelters in Massena with a combined production output of 255,000
metric tons per year (mtpy). Due to the historic 60 percent decline in aluminum prices since
last summer, Alcoa was considering curtailing operations at both Massena East and West
smelters, which would have resulted in elimination of about 1,100 jobs. Recognizing the
extraordinary economic circumstances, NYPA and Alcoa worked together to reach an
agreement that will allow the West Plant to remain operational at its current employment
level and to retain more than 250 of the approximately 420 East Plant employees during the
temporary curtailment of approximately 120,000 mtpy at the plant which will begin in May.
The more than 250 retained workers are essential to help prepare the East plant for its
planned modernization, keeping the plant ready for re-start, performing maintenance and
cleaning tasks. They will work on next phase activities for the modernization effort at the
plant that should also help lower the overall costs for the project.
“The Power Authority recognizes the impact the economic downturn has had on many
businesses across the state. It is critical to the economy and the future of Northern New
York that we step in and work with Alcoa to avoid losing this community-anchoring
company and largest private sector employer in the region with hundreds of high-paying
manufacturing jobs,” said Richard M. Kessel, NYPA president and chief executive
officer. “We understand Alcoa’s temporary business situation in the context of the global
economy and that we were facing the possible loss of their operations, but now we are
confident that the aluminum manufacturer will have a bright future in Massena."
“This is an excellent model of a government organization and private industry working
together to help retain jobs and bridge the gap through these unprecedented times,” said
John Thuestad, President of Alcoa US Primary Products. ”We both wanted to find a
solution to keep jobs, address the current business situation, and enable the next phase of
work on our Modernization Project to continue.
“This extraordinary effort by NYPA will save the Alcoa operations in the North Country,
retain nearly 1,000 jobs in the region, and preserve the company’s future expansion plans,”
Thuestad added.
The curtailment of approximately 120,000 mtpy in Massena brings the reduction of
Alcoa’s total primary aluminum output to more than 850,000 mtpy, or approximately 20
percent of annualized output.
In order to enable the Massena East Modernization Project to continue to move forward,
NYPA agreed to a more flexible schedule in light of the economic downturn. NYPA and
Alcoa officials will meet on a regular basis to review business conditions and both are
committed to establishing a project schedule that results in the modernization of the East
Plant as soon as global aluminum market conditions recover.
The agreement includes:
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Exchanging a portion of Alcoa’s “firm” hydropower allocation from the idled
East Plant to the West Plant and transferring its “interruptible” hydropower
allocation to the East Plant;
Waiving for two years the minimum charges related to its power allocations at the
East Plant;
Temporarily lowering Alcoa’s job commitment threshold to 90 percent, which
will conform with NYPA’s job commitment requirements of other industrial
companies; and
Allowing Alcoa to make payments to the North Country Economic Development
Fund as projects are approved instead of capitalizing the funds in full upfront.
“Although the decision to curtail and the necessity of some job reductions are difficult,
these steps and particularly NYPA’s cooperation in working with us through these
unprecedented times, are critical to the survival of the two Massena plants and they
preserve the future of the Massena Modernization Project,” said Thuestad.
“Under Governor Paterson’s leadership, the Power Authority will continue to do
everything within its power to support the upstate economy and to retain its most critical
employers, especially as we weather this fiscal storm,” Kessel added.
Alcoa is the world leader in the production and management of primary aluminum,
fabricated aluminum and alumina combined, through its active and growing participation
in all major aspects of the industry. Alcoa serves the aerospace, automotive, packaging,
building and construction, commercial transportation and industrial markets, bringing
design, engineering, production and other capabilities of Alcoa's businesses to customers.
In addition to aluminum products and components including flat-rolled products, hard
alloy extrusions, and forgings, Alcoa also markets Alcoa® wheels, fastening systems,
precision and investment castings, and building systems. The Company has been named
one of the top most sustainable corporations in the world at the World Economic Forum
in Davos, Switzerland and has been a member of the Dow Jones Sustainability Index for
seven consecutive years. More information can be found at www.alcoa.com
About NYPA:
■ NYPA uses no tax money or state credit. It finances its operations through the sale of
bonds and revenues earned in large part through sales of electricity. ■ NYPA is a leader
in promoting energy-efficiency, new energy technologies and electric transportation
initiatives. ■ It is the nation’s largest state-owned electric utility, with 18 generating
facilities in various parts of the state and more than 1,400 circuit-miles of transmission
lines.
Contacts: For NYPA: Christine Pritchard 518-433-6839 or
christine.pritchard@nypa.gov
For Alcoa: Media: Kevin G. Lowery 412-553-1424 (office), 724-422-7844 (mobile).
Investors Elizabeth Besen 212-836-2674