At Alcoa, we had to announce a major layoff of around 300 employees in 2008. The announcement was made in August, as we had come to an assessment that there was an urgent need to close the plant at Rockdale, Texas. The company had an aluminum smelter there and had a record of having idled away an estimated half of its production.
We analyzed that the closure of the plant would also affect an additional 100 employees, who are working on a contractual basis. In 2008, we had to close down half of the plant because of a critical issue with the continuous supply. The problem was with the power generating unit on Luminant’s onsite plant with the Sandow unit 4. These issues had exposed the company to uneconomical power prices, which became a major growing concern for us over time.
The plant had six operating potlines, out of which three were idled because of the continuous unit outages. The increasing costs in the local energy market reached a price as high as $2000 to $4000 per megawatt, calculated at peak time. When calculated, we found that this cost was an estimated, 100 times more than the normal.
As the idle lines meant a loss of around 120,000 metric tons per year, we had a discussion with Luminant on the problem and tried to devise solutions to the issue of Luminant’s unit 4 not performing to its maximum capacity. But all of our collaborative efforts resulted in no satisfactory conclusion, which presented us with no solution other than to lay off employees.
We sent a notification to the unit representatives updating them of our plan of action to lay off around 100 employees till the end of the month of August. We also communicated our intention of laying off an additional 60 in September, with 140 more to be laid off in the fourth operating quarter.
Our CEO removed any concerns on the part of the efficiency of our workforce, by giving an official statement which confirmed that our staff consisted of a skilled team, and we wouldn’t have thought about an employee layoff if there hadn’t been a major issue with the Luminant plant. John Thuestad said that since the operation capacity of the plant hadn’t been reliable over the past year, we were hard pressed to lay off our talented employee force.
We clarified our intentions by sharing that we were in a continuous collaborative discussion with Luminant and were looking for a solution in the shape of a competitive power which can ease the burden for everyone. But while the issue was under discussion, no immediate action could be taken as an effective solution, leaving us with no option other than to lay off a section of our workforce.