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October 1, 2004
Alcoa and Unions Reach Accord On Wenatchee, Saving 400 Jobs
PITTSBURGH--(BUSINESS WIRE)--Oct. 1, 2004--Alcoa (NYSE:AA) announced today that it has reached a tentative agreement with the United Steelworkers of America (USWA) and the Aluminum Trades Council of Wenatchee, Washington, an affiliate of the USWA that will save the jobs of approximately 400 workers at its idled aluminum smelter in Wenatchee.
Alcoa today rescinded the 400 lay-off notices it issued on July 26, following a tentative agreement between it and the unions whereby employees at the facility will be placed on the company's "Select Benefits" healthcare benefits program beginning in January 2005 until the company's Master Contract agreement with the USWA covering 15 Alcoa facilities and 8900 employees is renegotiated in 2006. The agreement is subject to approval by union members. A vote on the agreement will be scheduled shortly.
Upon approval of the agreement Alcoa will take immediate steps to restart the smelter, which has been idled since July 2001. Two of the four lines at the smelter are expected to be restarted, based on availability of acceptable power contracts. The ramp-up to two lines is expected to be completed by mid-2005.
Alcoa also no longer plans to record a pre-tax charge of $20 million in its 2004 third quarter to cover the costs of the lay-off, which it announced last month.
"We are delighted that we have been able to reach this tentative agreement. Hopefully this will be approved and we will have the conditions to enable restart of the Wenatchee smelter. I know this decision is very important to our employees, our unions, the Wenatchee community, our customers and the entire aluminum industry in the Pacific Northwest," said Alan Cransberg, Alcoa's President of North American Primary Metals. "We have said all along that we wanted to run this facility and that it not our intent to separate Wenatchee from the Master Contract. Now, thanks to the tremendous efforts of the community, the Chelan Public Utility District, government officials, our employees, and the United Steelworkers and Wenatchee Trades Council, we have a very good chance to maintain 400 jobs in Wenatchee that have excellent pay, benefits and conditions."
Upon its re-start, the Wenatchee facility will join Alcoa's Intalco facility in Ferndale, Washington as the only aluminum smelters in the Pacific Northwest operating today.
"We need our entire North American smelting system to be competitive and in order to achieve that, one of the areas that has to be addressed are the escalating costs associated with healthcare," said Cransberg.
"If approved, this agreement will allow Wenatchee to move forward and it is clearly fantastic news, but by no means is this the end," added Cransberg. "We all must continue to work together to find new and innovative ways to compete in a global atmosphere. This is and will continue to be a never-ending challenge. Our survival is based on being a low-cost, high-quality producer. There is no security if we can't meet both."
"Upon a successful vote, we will maintain our position as an economic force in the region," said Bob Wilt, Plant Manager at the Wenatchee Works facility. "Because we will continue to employ 400 people, we will account for nearly 2.4 percent of total employment in Chelan County and we will to generate approximately $35 million in personal income," Wilt said.
Alcoa is the world's leading producer and manager of primary aluminum, fabricated aluminum and alumina facilities, and is active in all major aspects of the industry. Alcoa serves the aerospace, automotive, packaging, building and construction, commercial transportation and industrial markets, bringing design, engineering, production and other capabilities of Alcoa's businesses to customers. In addition to aluminum products and components, Alcoa also markets consumer brands including Reynolds Wrap(R) foils and plastic wraps, Alcoa(R) wheels, and Baco(R) household wraps. Among its other businesses are vinyl siding, closures, fastening systems, precision castings, and electrical distribution systems for cars and trucks. The company has 120,000 employees in 42 countries and has been a member of the Dow Jones Industrial Average for 45 years and the Dow Jones Sustainability Indexes since 2001. More information can be found at www.alcoa.com