The ORMET Aluminum Plant to Lay Off 700 and Close Down

Save ORMET for OH & WV Workers

Ormet will close, put 700 out of work, about half from WV

From the Article by Dan Gearino, The Columbus Dispatch, October 5, 2013
 
Aluminum-maker Ormet Corp. is shutting down and laying off most of its 700 workers, a blow to the economy of southeastern Ohio. (About half of these workers lives in the New Martinsville area of West Virginia.)

This Ohio River valley aluminum smelter announced its decision yesterday afternoon, two days after the Public Utilities Commission of Ohio approved the company for part of the additional electricity subsidies that the company had called necessary to remain viable.

Mike Tanchuk, Ormet’s CEO, said in a statement that the PUCO’s actions were merely a restructuring of existing aid, not the additional help the company desperately needed. He said the plant closing is partly a result of the state’s deregulation of the electricity market, which he blames for the dramatic rise in power bills.

Ormet’s managers have told employees that the company will retain only a few workers for security and maintenance, according to workers that The Dispatch spoke to yesterday. That leaves open the possibility that the plant could reopen if economic conditions change. (Some plans included the construction of a 500 MW power plant to make electricity from frack gas for the plant.)

The company has struggled in recent years because of low aluminum prices and rising electricity prices. It uses more electricity than any other business in the state, with demand peaking at about 500 megawatts, enough to power a medium-size city.

To help Ormet stay in business, American Electric Power and the PUCO agreed to a series of electricity-rate subsidies that are the largest discount of their type in OHIO. Other customers foot the bill, with an extra charge of $2 to $3 per month for a typical AEP household. Since 2009, Ormet has received about $308 million in rate discounts. At the same time, AEP’s rates have risen, which Ormet officials have said cancels out the benefit of the subsidy.

This summer, Ormet asked the PUCO for an emergency increase in the discount. Ormet had hoped that the additional aid would help pave the way for a sale of the company to Wayzata Investment Partners of Minnesota.

On Wednesday, the state panel approved only part of Ormet’s request. It had to weigh testimony from the company’s supporters against pleas from consumer advocates and others who said the subsidy already was too large.

At full employment, Ormet had more than 1,100 workers. It is one of the largest employers in an economically depressed region that covers parts of Ohio and West Virginia. “It’s just unfortunate — devastating in many ways,” said Terry Tamburini, executive director of the Southeastern Ohio Port Authority. He hopes the growth of the oil and gas industry can help pick up some of the slack left by Ormet. The industry has grown in the region as companies move in to drill in the Utica shale.

“Everyone wants to see the workers keep their jobs and the company stay open,” said Governor Kasich spokesman Rob Nichols. “The state has worked hard to make that happen.” He added that it would “be welcome and helpful” if OTHER STATES would step up to offer aid to Ormet, because half of the company’s employees live in other states. “So far that hasn’t happened, and there’s been no indication that it will happen,” he said. (The Governor of WV could comment, or get involved?)