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Aluminum Plant Shuts Down, Lays Off 200

by Michael Jamison, of the Missoulian
Billings Gazette, December 25, 2008

COLUMBIA FALLS - Some 200 employees at Columbia Falls Aluminum Co. will lose their paychecks in 60 days, as the plant closes its doors against a global economic recession.

"A lot of people out here are in pretty glum moods today," CFAC spokesman Haley Beaudry said. "This is pretty tough news to break, especially to such a great work force."

Beaudry blamed high raw material and power costs, low aluminum prices and a recent court ruling for the shutdown.

"Worldwide, and domestically, there's a real oversupply of aluminum," Beaudry said.

Homebuilders, car manufacturers and airplane factories all "are in stagnant markets," he said, and aluminum prices have been falling as demand plummets.

A few months ago, aluminum sold for more than $4,000 per ton. Today, the price is hovering at about $1,400 per ton. At the same time, alumina and other carbon-based raw materials needed to make the metal are increasing in price "quite significantly."

One major cost of production is electricity, which provides the catalyst for turning alumina into aluminum. Historically, CFAC consumed as much as 25 percent of all power used in Montana when running at full capacity.

In the past, Bonneville Power Administration has sheltered the industry from high power prices, by selling electricity from federal hydroelectric dams at cut-rate prices to large industrial consumers. But the share of low-cost power available to industry has shrunk markedly as domestic demand has risen, and last week a court ruling stripped CFAC of any future preferential pricing, Beaudry said.

Federal law requires large employers to give workers a 60-day notice before the paychecks stop, and Beaudry said employees will be paid through February.

Whether the plant actually stays open the full 60 days, however, "isn't something we've decided yet."

Management also has not decided whether a skeleton crew will be kept on for general plant maintenance.

The plant has struggled for years, and in July 125 workers were laid off. Currently, CFAC is running at just 20 percent, with one of five "pot lines" operational.

Those laid off in July qualified for federal retraining dollars, Beaudry said, but he was not certain that these last 200 will likewise enjoy those same benefits.

The layoffs are the latest in a string of northwest Montana job losses. Since autumn, Plum Creek Timber Co. has laid off about 125 workers; Semitool Inc. has laid off 100, and sent 700 more home during a temporary shutdown; Troy Mine has announced a closure affecting 185 jobs; and Goose Bay reports 60 jobs will be lost in February, when that contractor closes shop.

Michael Jamison
Aluminum Plant Shuts Down, Lays Off 200
Billings Gazette, December 25, 2008

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