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Kaiser Denies Idled Workers' Wage Request by John Stucke - Staff writer The Spokesman Review, January 31, 2001

Company won't pay full wages or make promises about Mead

Kaiser Aluminum Corp. has rejected demands to continue paying laid-off Steelworkers full wages while the Mead smelter is idled and the company profits from selling its federally subsidized allotment of electricity.

Talks between the labor union and the company have stalled as Steelworkers seek 100 percent pay from the company along with written assurances that the Mead smelter will reopen in October.

Kaiser, however, isn't making any promises. And it wants Steelworkers to turn to unemployment insurance to supplement company paychecks.

The Mead smelter shut down in December, and Kaiser agreed to pay about 545 Steelworkers full wages through January.

With the deadline reached, a new agreement is needed. Steelworkers automatically receive about 70 percent of their wages through a previously negotiated contract clause that creates a sort of in-house unemployment pay program.

The remaining 30 percent has created an 11th-hour snag separating the two sides. Steelworkers said they may be facing less pay beginning Thursday and question Kaiser's commitment to restarting Mead.

Crying foul first, the union accuses the company of trying to double-dip at the taxpayer well.

"There's no way they should be profiteering from reselling federal power . . . and then ask us to draw unemployment" from the state, said Wayne Bentz, head steward of Steelworkers Local 329. "Right now, Kaiser isn't even looking down the road."

Kaiser, though, must ensure its future in Spokane by saving money from power sales, company spokeswoman Susan Ashe said. That should help offset what will be far higher prices for electricity beginning in October, she said.

"We anticipate our power rates doubling," she said.

The Bonneville Power Administration announcement last week that electricity rates could rise 60 percent over the next five years chilled Kaiser officials.

The company has a new contract with BPA beginning in October, which Ashe said provides 40 percent of the power needed to operate Mead. That's less electricity that will cost more money than Kaiser's current contract with BPA. Add another hefty rate hike, and the company may not find an economical way to smelt aluminum in Spokane.

Money from power sales, she said, have become Kaiser's best hedge against keeping the Mead smelter shuttered.

Ashe said Kaiser had to reject a Steelworkers proposal that sought full wages for hundreds of workers who were laid off for reasons other than federal power sales.

In all, about 545 Steelworkers from the Mead smelter have been laid off because of Kaiser's reselling of BPA electricity. About 400 more, Ashe said, were never recalled to the smelter after a nearly two-year labor dispute as Kaiser decided to ease production and quit buying electricity from private suppliers.

Funding those workers laid off because of earlier production curtailments unrelated to federal power buys are impossible, she said, especially with the uncertainty of the company's electricity supply. She ticked off a list of other expenditures the company is paying with proceeds from power sales, including aluminum to fulfill contracts and supply the Trentwood rolling mill; pensions to regional retirees and dependents; and funding shutdown and future start-up expenses at Mead.

BPA spokesman Ed Mosey said the agency wants Kaiser to pay its workers full wages but can't force a settlement.

"That's not something we try to dictate, but we do expect that they compensate their employees," he said.

Also, Mosey said BPA expects Kaiser to invest in generating facilities so it can operate independent of Bonneville in five years, and to give some of the money made from power sales back to BPA to help offset rising costs to Northwest ratepayers.

BPA has reached that sort of understanding with other Northwest aluminum companies and wants Kaiser to follow suit.

Bentz said a sticking point between union and company officials is restarting Mead.

"We don't want them to take the money and run," Bentz said. "We need to make sure they intend to do business here for the long term."

Ashe said Kaiser's intentions are clear.

"We'll continue to remarket power through September and are looking for any solution possible to allow these plants to be economic," she said. "It's a dire situation we find ourselves in.

"We're working very hard to find a future for these plants."