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Options Few for Intalco Workers by Aubrey Cohen The Bellingham Herald - October 17, 2003

WORKPLACE: Layoffs of 200 will be based on seniority;
official says jobs elsewhere are "pretty tenuous."

Alcoa Intalco Works officials are still trying to figure out who will be among the approximately 200 workers laid off by the end of the month, a company spokeswoman said on Thursday.

"I know it'll have a plant-wide impact," Mellani Hughes said.

Officials will tell some affected workers next week and some the week after, Hughes said. She said the aluminum smelter will keep some of the 200 workers on through the end of the year.

Few relocations
Rumors circulated Wednesday that Alcoa would offer workers jobs at plants in Iceland and Quebec. On Thursday, Hughes said Alcoa might have limited opportunities elsewhere for salaried employees.

"There may be some positions, but I think it's pretty tenuous," she said.

As specified in its contract, Intalco will make cuts to union employees by seniority within each classification. In 2001, the plant offered early retirement to some workers. That will not happen this time, Hughes said.

Many workers have been at Intalco just a few years, while many others have worked there for three decades or more. Some long-time workers have said they would take early retirement if it was offered, said Vicki Henley, shop steward with the International Association of Machinists and Aerospace Workers union.

Hourly employees who are laid off will get six months of medical coverage, along with unemployment insurance and two years of rights to be the first recalled for openings at Intalco, Henley said.

The workers also are eligible for retraining under federal law. The union already has one person on hand to help with retraining and job placement, and has applied for another, Henley said.

Intalco's future
Alcoa officials had said they would close Intalco if the Bonneville Power Administration raised its rates. The federal power marketing agency boosted rates by 2.2 percent on Oct. 1, but would get rid of the increase and cut rates another 7.49 percent under a proposed settlement of a lawsuit by Northwest public utilities districts.

If it becomes official this month, the settlement would lower rates on March 1, BPA spokesman Mike Hansen said. At that point, BPA would refund the difference between the new lower rate and the rates customers have been paying since Oct. 1.

Mike Tanchuk, Alcoa's Northwest regional president, said Wednesday that to keep Intalco open the company would need the rate cut and refund, tax incentives from the state Legislature and assurance of long-term power price stability past the end of its current BPA contract in 2006.

Under the settlement, BPA would give the rate refund to customers as a credit on bills for the rest of 2004, Hansen said. He said Alcoa has asked about getting more of the rebates sooner, but BPA cannot legally do that.

Some members of Whatcom County's delegation to the state Legislature have said they will push for tax incentives during the next session.

Positive outlook
It's tough to predict what power prices will look like after 2006, but there is reason for optimism, Hansen said. He said costs associated with the 2001 power crunch are going away, and the drought that has limited the dam-dependent agency's ability to sell surplus power appears to be easing.

In an effort to avoid price hikes, BPA officials are looking to cut costs, and will work closely with a new customer group that plans to review its budgets and spending, Hansen said. He said the agency also has taken steps to make its long-term predictions more accurate and has hired someone to look into the possible risks of decisions the agency might make, possibly saving it from making costly choices.

The agency also plans to revive a regional dialogue about who the agency should serve after 2006 and how it should serve its customers, Hansen said. He said BPA officials put this on hold during the negotiations with the Northwest public utilities, but hope to start it up again in the next couple of months and expect it to take about six months.

BPA officials hope to keep rates stable, or lower then they are now, Hansen said. "We know that if the economy's going to turn around energy rates have to stay as low as possible."

Earlier this month, Washington and Oregon senators and representatives sent the BPA a letter urging the agency to lower power rates and cut $100 million in costs in the next two years.

On Thursday, U.S. Rep. Rick Larsen, D-Lake Stevens, said members of the Northwest congressional delegation will "hold BPA's feet to the fire on cutting its costs."

"The Bonneville Power Administration has to be very aggressive about getting back to affordable and stable electricity rates for the sake of our economy and our ability to create jobs in the Pacific Northwest," he said.