MRO Magazine

Everyone Loses from Alcoa’s Lockout at ABI Smelter: USW


Industry

July 19, 2018
By MRO Magazine
MRO Magazine

Industries

As aluminum giant Alcoa releases its second-quarter results today, the United Steelworkers (USW) is revealing the true extent of losses incurred by the company’s lockout of workers at its ABI smelter in Bécancour.

Each month of the lockout is depriving Alco and Rio Tinto – co-owners of the ABI smelter – CAN$85 million in revenues (US$66 million) and CAN$26 million (US$20 million) in profits, the USW said.

The union calculated lost revenues and profits based on data from the Commodities Research Unit (CRU), a U.K.-based business research organization specializing in global aluminum markets among other sectors.

The USW’s analysis reveals that, since the lockout at the ABI aluminum smelter began on January 11 this year, Alcoa and Rio Tinto have lost CAN$468 million (US$367 million) on first and second quarter revenues.

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“The lockout is costing Alcoa and Rio Tinto dearly,” said Clément Masse, President of USW/Syndicat des Métallos Local 9700, representing the 1,030 locked-out ABI employees.

“Aluminum prices are healthy right now, so each month that this dispute drags on represents lost revenues and profits. But the lockout also is costing Quebecers dearly, since Hydro-Québec has been deprived of $114 million in electricity revenues to date – and counting.”

The data released today by the USW takes into account factors such as a two-thirds reduction in production at the ABI smelter during the lockout, as well as the price of aluminum and the Midwest premium. The union says its calculations are conservative, given that they don’t include losses from a complete cut in production of ABI’s value-added products such as aluminum billets and slabs.

“The effects of this lockout are disastrous. Alcoa and Rio Tinto are losing, the Quebec government and all Quebecers are losing, workers and their families are deprived of their livelihood and the entire community is affected,” said Masse. “Everyone loses, so why let this continue? It is high time to abandon this approach and to get back to producing high-quality aluminum at an efficient and productive smelter that operates with green electricity.”

The ABI smelter is 74.9 per cent owned by Alcoa, with Rio Tinto owning the remaining 25.1 per cent. Prior to the lockout, the USW and the company were close to an agreement and were working to resolve two outstanding issues – pension plan changes and language related to seniority and employee turnover.

However, after the Quebec government recently appointed a special mediator to assist in the negotiations, the company has brought new demands for concessions from the locked-out workers. Earlier this month, more than 90 per cent of the workers voted to confirm their support for their leadership and bargaining committee.