Most of the workers at a Frederick County aluminum plant will be laid off starting next month as production is curtailed because of high electricity prices, the plant's owner said yesterday.
Alcoa Inc. plans to lay off 500 of the 600 workers in late December, company spokesman Jake Siewert said. Another 75 employees are expected to be laid off next year from the 35-year-old plant.
The company probably will shutter the 400-acre smelting plant, called Eastalco Works, unless electricity prices fall, Siewert said. "If energy prices in the mid-Atlantic stay where they are, it's virtually impossible to see a scenario where that smelter is viable," Siewert said.
Smelting converts the extract of bauxite ore into aluminum in a process that consumes huge amounts of electricity. Companies that buy the aluminum transform it into door frames, windows and car parts.
As domestic electricity prices have risen, aluminum smelting plants around the country have closed. Companies have moved production to countries where electricity is cheaper. The price of electricity typically is the biggest factor in deciding where to locate new plants.
Alcoa had a long-term power contract, which was signed years ago, before electricity prices spiked. Alcoa says it cannot operate the plant, located outside Frederick, if it has to pay the going rate being charged by power suppliers. Electricity costs would far exceed what Alcoa is paying in other parts of the world.
Alcoa recently told Eastalco workers that layoffs were likely.
"It's starting to hit home," said Chip Cook, president of United Steelworkers of America Local 7886, which represents Eastalco employees. "People are starting to realize it's a reality and that -- more than likely -- they're not going to restart the plant."