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Aluminum industry melts down

By Staff | Jan 7, 2009

The aluminum industry in West Virginia is melting down, and it could be taking Tyler County with it.

Precision, Inc. in Sistersville has laid off over 20 employees. The plant has over 50 employees. The plant has also been temporarily shut down since Dec. 31. Precision specializes in heavy fabrication and machining of components for aluminum smelters and other production facilities.

Precision, Inc. Vice President Ron Larson says that the layoffs are due in part to the problems plaguing Century Aluminum in Ravenswood.

“Century Aluminum is a valued customer of Precision, LLC in Sistersville,” stated Larson. “For many years, we have shipped a significant amount of product from our West Virginia facility to support the Century Ravenswood operations on a regular monthly basis.”

Century Aluminum of West Virginia has shut down one potline at its Ravenswood plant and is considering halting all production because of slumping prices.

Century notified workers of the potential shutdown Dec. 17. The plant would cease operations beginning Feb. 15 if aluminum prices don’t stabilize and the company can’t reduce monthly costs.

The shutdown of one potline reduced production by about 3,540 tons per month. The shutdown was completed by Dec. 20 and about 120 workers were temporarily moved to other plant operations. The plant employs 685 workers.

The partial shutdown has been detrimental to Precision’s operations, causing the local plant to lay off workers as well.

“Throughout most of 2008, Precision employed an average of 50 employees at the Sistersville Plant,” explained Larson. “However, at the end of December, we announced a layoff of 21 employees. Five additional employees had already been on layoff status. While not all of these job reductions are directly related to the Century situation, about half of them can be attributed to the current difficulties at Century Ravenswood.”

Manchin spokesman Matthew Turner agrees that the times are very hard for the state’s aluminum industry.

“Let me make one thing clear: this is a difficult situation I think for probably any American company involved in the aluminum industry,” stated Turner.

The biggest problem, says Turner, is too much supply, bringing down the worldwide price of aluminum. In May, the cost for a metric ton of aluminum was $3,000. This has since dropped to around $1,500 per metric ton. Turner says the downturn in the economy has not helped things either.

“It is our understanding that there is a lot of aluminum on the market and it has caused the price to go down,” explained Turner. “In addition to the national economy it’s a difficult situation. It’s probably affecting everyone involved with that industry in the state. You’ve got a surplus of aluminum, so it’s tough for recyclers and people who are bringing stuff in to be recycled. In addition, companies producing aluminum materials can’t sell them at a high enough price to cover their costs.”

Gov. Joe Manchin met Dec. 23 with local and plant officials at the Century plant. Manchin will meet face-to-face with Century executives again Saturday, Jan. 10.

“We all have to be willing to see what sacrifices must be made to get through a downturn in the market,” said Manchin in a statement about Century. “We must also look at long-term ways to be more competitive. State government must be a good partner.”

Precision isn’t the only plant in Tyler County that could be affected by the volatile aluminum market. Aleris operates an aluminum recycling plant in Friendly. Phone calls to Aleris went unreturned.

Despite Tyler County’s plants being smaller than the Century plant, Turner emphasizes that the state government is willing to use its resources to help any plant from going under.

“Obviously a company that employs 600 to 700 is a major concern, but even when one family-owned business is struggling it’s important to us,” stated Turner. “If it’s a small business, a large business, a family-owned business, or if it’s something in Tyler County; if there is something we can do about it, we want to do it. We have a development team that is out there and is certainly willing to work with anybody.”

Will saving Century help save other plants, such as Precision? That is something the governor’s office can’t guarantee.

“That might be a jump to say (saving Century) is going to stabilize everyone involved with (aluminum) in the state,” said Turner. “We don’t know what we can do. Again, (Manchin) is optimistic. We certainly can’t promise anything. There is no instant solution, but unless we get together and get the appropriate folks involved, there is no way we will find a solution.”