Power Crunch Idles Aluminum Plant By H. JOSEF HEBERT Associated Press Writer

August 9, 2001

MEAD, Wash. -- It is midmorning and Kaiser Aluminum's smelting plant should be humming with activity. But as Mark Amas, a pipefitter and welder, swings his car into the plant's near-empty parking lot, there is silence.

"Everything's shut down. It's a ghost town," he says. The huge conveyor belt that once dropped tons of raw aluminum ore into smelting pots stands idle. The pot rooms are closed. The bake furnace is on cold standby.

Amas, 51, who began working at the plant 27 years ago, attracted by the good pay and job security, hasn't been inside its fences since December.

He was among the earliest victims of the West's power crunch.

Once employing more than 7,000 workers, the Pacific Northwest's 10 aluminum plants are now idle and likely to stay that way for some time because the juice that powered them is too expensive and needed elsewhere.

California's energy crisis, with its soaring prices and sporadic blackouts, has eased, thanks to cooler weather and a rush to conservation. But for the aluminum workers in the Northwest, the surging cost of electricity in a region known for it's cheap power is still leaving its imprint. It has changed lives, in some cases forever.

Over nearby Hawthorne Street, power lines that once sent enough electricity into Kaiser's Mead plant to light most of nearby Spokane now carry only a trickle of juice from a substation _ enough for a few dozen workers to keep up plant maintenance.

In June, the Bonneville Power Administration, the government power marketer that provides half the electricity to the Northwest, reached a power buyback agreement with most aluminum companies, idling the region's plants until at least next April, and perhaps as long as two years. Facing power price increases of about 60 percent, the companies said that's too expensive to operate, anyway.

The agreement gave Bonneville 1,200 megawatts of badly needed electricity for other customers. In return, Bonneville pays the aluminum companies for not using the power, allowing most workers to continue to get partial pay.

But Kaiser is not part of the agreement. And while Bonneville remains obligated to provide it power, the company, based in Houston, Texas, hasn't decided whether to resume operations in October when the higher electricity prices kick in.

So Amas and some 600 other workers at the Mead plant, who still have hopes of returning to work someday, are in limbo -- not certain if they ever will work again. Kaiser recently called another 34 people back to work at the Mead plant, but still has given no indication that production will resume anytime soon, says Wayne Bentz, an officials of the United Steelworkers Union.

Like the other senior workers, Amas has been getting partial pay from Kaiser. But the 70 percent of base pay is far less than what many of the workers normally earned counting overtime and shift bonuses.

"It's enough to get by," says Amas, who lives in the outskirts of Spokane with his wife and teen-age daughter. "We cut out going to movies, cut out restaurants. Vacations are nonexistent."

"We're still hanging by the thread," says his wife, Mary. "But we're managing."

He recently finished an eight-week course to help him find a job. All of the 30 people in the class were laid off Kaiser workers, he says. If the plant shuts permanently he can put in for retirement, he says, but as long as the plant is on standby that's not an option.

Austin Waggy, 38, a molten metal man at the plant since 1996, isn't as lucky. Because he's been with the company less than 10 years, he hasn't received any pay since April and won't get any unless the plant restarts. Divorced and with three children, Waggy says he's been doing odd jobs and looking to regroup.

He recalled his excitement when he joined Kaiser five years ago and started getting an hourly wage of $17-plus. It was "good money, good pay and good benefits."

Meanwhile, Kaiser, which has annual sales of $2 billion, has profited handsomely from the surging electricity prices.

When wholesale power prices soared, the company shut down its plants and sold on the open market the cheap power it got from Bonneville under the contract expiring in October.

So far, it has reaped $468 million in profits on electricity sales, more than it could have earned selling aluminum. Bonneville has demanded that some of those profits be used to compensate workers until the plants are reopened. Scott Lamb, a Kaiser spokesman, said the company has no such obligation.

Kaiser's next step is anyone's guess. The company plans to evaluate its options -- from a partial restart to a permanent shutdown -- in the coming weeks, according to Kaiser spokeswoman Susan Ashe.

"We're waiting for the ax to fall," says Tim Charbonneau, a vice president of Steelworkers Local 329, which represents the Mead workers.

"You have to prepare yourself for the inevitable, which I think is coming," says Amas. "I thought I had the American dream, but now it's a pretty bleak picture."

___

On the net:

Kaiser Aluminum Corp.: http://www.kaiseral.com

Bonneville Power Administration: http://www.bpa.gov

Aluminum industry: http://www.aluminum.org

(PROFILE (CO:Kaiser Aluminum Corp; TS:KLU; IG:MET;) ) Copyright © 2001, The Associated Press

-- Anonymous, August 10, 2001