Rebirth Of Wise Alloys Plant Means Jobs For Shoals

FLORENCE, Ala. (AP) — The parking lots appear full outside the massive Wise Alloys Listerhill plant. Inside, coils of aluminum and 15-ton castings are rolled out. Major deals with Anheuser-Busch InBev and Coca-Cola — two giants in the beverage can industry — have made long-term expectations high.

FLORENCE, Ala. (AP) — The parking lots appear full outside the massive Wise Alloys Listerhill plant.

Inside, coils of aluminum and 15-ton castings are rolled out.

Major deals with Anheuser-Busch InBev and Coca-Cola — two giants in the beverage can industry — have made long-term expectations high. Jobs appear secure for the 1,000 Wise employees as production levels are reaching nearly 1 billion pounds of product per year.

Joe Pampinto, senior vice president and plant manager, said the figure is impressive considering most of itsproduct weighs less than in previous years because it's a lighter aluminum gauge for cans.

"We've added about 75 to 100 direct jobs in the last year," Pampinto said. "With increased volume comes increased spending in the community.

"We're definitely positioned for a very bright future, and there's a lot of exciting things down the line."

Today's announcement of another $25 million expansion that will bring 43 more workers to the plant is further evidence that Wise Alloys is on solid footing in the Shoals.

The trend at Wise rings sweet for the community. Generations of Shoals residents, as well as the Shoals economy, have depended on the quality salaries and benefits earned in the sprawling facility in eastern Colbert County.

On the verge of collapse

It hasn't always been that way.

The 70-year relationship, which began under the Reynolds Metals Co. flag, has experienced rocky moments, particularly since the late 1990s. At times, the plant's future appeared doomed.

"If we had lost that facility, it would have been devastating to this community," said Florence Mayor Bobby Irons, who spent about 30 years in management at the Listerhill and Richmond, Va., Reynolds facilities. "I was just scared to even think about what would have happened to the Shoals area had that plant been shut down and those jobs lost."

The long relationship started in the 1930s when Richard S. Reynolds traveled to Europe in search of additional aluminum sources for Reynolds Metals.

He returned to the United States with much more: Reynolds shared with Congress stories about the arsenal Adolf Hitler was building in Germany.

U.S. Sen. Lister Hill, of Alabama, listened, and the two persuaded Congress it was in the best interest of the nation to begin producing military airplanes. The local Reynolds plant was created, and supplied the nation with airplanes during World War II from 1942-45. Afterward, it started producing aluminum foil. From there, the Listerhill facilities continued a long history as a key employer in the Shoals.

Things began changing in the 1990s. Layoffs became common. Rumors of closing or selling the plant were rampant.

A proposed sale to Alcoa was denied in 1997 when U.S. Justice Department officials claimed Alcoa ultimately planned to close the local facilities.

Irons said the plant had about 2,000 employees and an annual economic impact of $250 million at the time. Irons was retired, but he and a group of other business leaders formed Avalon Aluminum Co. in 1998 to purchase the plant in an effort to save it. The company's financial backer pulled out, however, ending the deal.

The plant was on the verge of collapse.

Plan for survival emerges

A year later, Wise Alloys took over ownership and has operated the plant since.

"Fortunately, Wise came along, and it just fit their business plan and everything came together," Irons said.

He said Wise provided Reynolds with about 25 million pounds of scrap per month at the time, so Wise officials were concerned about the local plant's future. They contacted Irons and other local officials and they met in the Shoals.

"As they began to meet with us and look at the plant closer, they became very interested in developing a partnership with the local folks," Irons said.

Irons helped oversee some $600 million in modernizations at the plant in the 1990s, so he knew the facilities and equipment were in good shape.

"As we moved more and more into discussion, they became more and more sold on the future of the alloys plan, and they decided to take it all," he said.

That isn't to say things have been perfect since the Wise signs and purple "W'' logos were painted on the plant in April 1998.

About 1,600 employees worked at the plant in 1999, but a series of layoffs reduced it to below 1,000 within four or five years. The Retirement Systems of Alabama lent Wise $30 million in 2006 to stabilize operations, but additional bad news was ahead.

A Securities and Exchange Commission report revealed Wise Metals Group posted losses of $1.3 million for the first six months of 2007. RSA stepped in again and purchased 25 percent of the group for $75 million.

In November 2007, several labor workers went on strike for less than a week before a new deal was reached. Morale was low, plant officials said.

"We were down to about 800 employees just a few years ago," said Sandra Scarborough, senior vice president of corporate human resources.

The expansion announced today will take the work force above 1,000.

Records set daily

Union officials say business is good at the plant, and the future appears positive. Still, they stop short of saying relations are perfect. They can be strained at times, but they agree it seems to be working.

"There's a lot more job security because of the contracts we have," said Steve Slappy, who worked at the plant for 35 years and was laid off several times in the 1980s and initially when Wise took over in 1999. He's back on the payroll and remains optimistic.

"But now, after all these years, after all this time, there is great hope," Slappy said. "We greatly expect we're going to keep this plant running because we have the business."

Slappy also endured having his time cut to 32 hours a week this past decade. Scarborough said many employees were reduced to 32 hours a week around 2009. Today, all shifts are operating 40 hours a week and the plant is running 24 hours a day, seven days a week.

Slappy said that makes a major difference. "There's more peace of mind for us. We're setting records all the time, and people enjoy doing that — and you can do that because you enjoy your job and enjoy going to work."

Ricky Hargett has worked at the plant since 1979. It's the same place his father worked.

"I was raised from money that came from that place, and raised my family from money that came from that place," Hargett said. "We're putting out 1.6 million pounds (of can product) a day. That's a lot of cans. We're breaking records every day.

"Anheuser-Busch has been a big help, and Coca-Cola. And the Retirement Systems of Alabama has really helped. If they use that money like it should be, that should keep us where we want to be."

Hargett said the plant also benefits from a quality work force.

"They have good employees who want to see it do well," he said. "We'd be crazy not to. Our livelihood is that plant."

Wise managers credit workers for the role they have played in the company's rebirth.

Pampinto said stability is helping Wise obtain a high retention rate, with workers who focus on safety, efficiency and cost containment.

Scarborough said employee accidents are down by 70 percent in recent years.

"We contribute that to the work force we have here," she said. "We feel fortunate to have a quality and dedicated work force. We receive thousands of applications each year for the job openings we do have."

The five-year contract with Anheuser-Busch InBev, which was completed in September 2009, is a major reason for the optimism. It came at a time when some former Wise workers were on the unemployment line after layoffs. Everyone who was on the employment-recall list was called back to work, company officials said.

The hope among plant employees is that the contract will be extended.

"We're going to be held accountable to produce the quality metals that they want and volume they want, and there are always extensions available," Scarborough said.

The Colbert County plant produces aluminum sheets that are turned into cans for Anheuser-Busch productssuch as Budweiser beer, plus it is fulfilling the Coca-Cola contract.

Future appears bright

The plant would be open to additional contracts, as well.

"We're like any other business; we would always be interested in other contracts," Scarborough said.

Based on industry reports, the aluminum market appears to be looking up. The website Commodity Online states global aluminum consumption is expected to see 8.5 percent growth through 2012, and demand might surpass production by 2020.

RNCOS, an international marketing research firm, expects demand for aluminum products to double by 2020. With that comes additional opportunities for companies such as Wise.

David Bronner, chief executive director at the Retirement Systems of Alabama, or RSA, has used financial resources from his organization to give Wise flexibility and the ability to expand to handle new contracts. In 2010, RSA spent $520 million to pay all debt at Wise.

In all, RSA has about $625 million invested in operations at Wise. Bronner has protected RSA through the interest it will receive as the loan is repaid. Should Wise fail to do so, RSA would take over ownership of the plant.

"The salaries paid there are phenomenal compared to businesses of that size in the rest of the state," Bronner said. "When you have a chance to save something like that, you do it. They have the staff and ability and now they have the financial ability to operate as a top-notch, professional company.

"We've tried to keep it alive until we could do something to turn it around. Now, they've gone from (producing at) 50 to 55 percent capacity to full capacity. Now, it's a matter of delivering the quality products to those great companies like Anheuser-Busch InBev and Coca-Cola. If you do that, there will continue to be a bright future there."