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Alcoa Lays Off 660 In Texas

Problems with getting electricity, along with turbulent market conditions and inefficiency at the Rockdale smelting plant led to the layoffs, aluminum manufacturer said.

AUSTIN (AP) -- Aluminum manufacturer Alcoa Inc. said Tuesday it is laying off 660 workers at its Rockdale smelting plant.

Problems with getting electricity along with turbulent market conditions and inefficiency at the plant led to the layoffs, said Kevin Lowery, a spokesman for the Pittsburgh-based company, which laid off 160 employees in June and cut nearly half its smelting operations.

Alcoa will continue some operations in Rockdale, employing 140 people, the Austin American-Statesman reported in its online edition. Rockdale is about 60 miles northeast of Austin.

Alcoa said it decided in June that electricity from power plants designed to feed the smelting operation was unreliable.

"When you're running an aluminum smelter, power needs to be online for 24 hours a day, 7 days a week, 365 days a year, for 50 years," Lowery said. "But it would be offline, then online, then offline, then online. It was like a yo-yo."

The Dallas-based utility company Luminant, formerly TXU Corp., which operates the local power plants, disputes some of Alcoa's contentions.

"We had some outages, but we made several alternative arrangements to get them reasonably priced power, and they didn't take advantage of that," said Tom Kleckner, a spokesman for Luminant.

Luminant said in a prepared statement: "We believe Alcoa has a history of using layoffs like this as a vehicle for managing costs and driving the company's profitability. Alcoa should acknowledge its independent decisions instead of blaming power supply issues and unspecified 'market conditions.' "

For years Alcoa had been mired in a dispute with environmentalists and the U.S. Justice Department over emissions from its coal-fired power plant operations on the site. Citizens and environmental groups accused Alcoa in a lawsuit of illegally releasing more than 1 million tons of air pollution from the plant during a 17-year period.

As part of a 2003 settlement, Alcoa was required to pay a $1.5 million fine, spend $2.5 million on environmental mitigation projects in Central Texas and replace its three coal-powered generating units at the plant with a single cleaner-burning, coal-powered unit.

Last year a federal judge gave the green light for construction of the unit. It is scheduled to come online in 2009.

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