News
Columbia Falls Aluminum Co. cuts production again- 175 people will be laid off
Columbia Falls Aluminum Co. announced Tuesday it was laying off 175 people and curtailing 67 percent of its operations because of poor market conditions.
By Dave Reese
The Daily Inter Lake
The layoff will begin Sunday, according to Haley Beaudry, external affairs officer for CFAC.
The aluminum company, which employs 340 people, manufactures aluminum from alumina. Beaudry said rapidly expanding production of aluminum in China is sending alumina prices skyward because of increased demand. That, along with high energy prices and a low-water year that spells trouble for hydropower, convinced CFAC officials to shut down two of its three operating potlines.
"It’s like a perfect storm has hit us in the economy," Beaudry said. "The price of power is up, and it’s not looking good with low water."
The price of alumina has doubled in the last month, according to Beaudry. "The Chinese have put such demand on the stuff it has made the market go crazy," he said. China produced 2.8 million tons of aluminum in 2000. That increased to 4.3 million tons last year, and this year could go to 5.1 million tons.
At full capacity, Columbia Falls Aluminum has five potlines and produces about 160,000 tons of aluminum a year. Because of turmoil in the electricity market in 2000-2001, the company decided to temporarily sell its power on the open market rather than produce aluminum.
In September 2000 it shut down one line. Another decision was announced in December 2000 to shut another 1 1/2 potlines. Then in January 2001 it laid off 245 workers and closed the plant, but kept a skeleton staff on hand to perform maintenance until the power market stabilized. The laid-off employees enjoyed full pay and benefits through 2001.
Then in March 2002, CFAC announced the restart of one potline, and by June had three of its five potlines running.
After this Sunday, the Columbia Falls company will keep one potline running in order to work on new operating procedures and "retain the talent that we have out here," Beaudry said.
Workers affected by the layoffs did not receive their pink slips yet, and Beaudry said it was not known what the severance packages would be.
He doesn’t expect the alumina or power markets to stabilize soon. If it were a short-term market challenge, they’d keep the plant open, he said. "But we think it’s going to take more than a couple of months to get things back in order," Beaudry said.
On the other hand, "the price of raw material can’t remain that high compared to the price of the finished product for very long."
CFAC began operation in 1955. The shutdown in 2001 was the first time the entire facility had been idled. Glencore International acquired the plant in 1999.
Reporter Dave Reese may be reached at 758-4438 or via e-mail at [email protected]
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