Alcoa announced that it has entered into an agreement with New York State to increase the competitiveness of its Massena West smelter.
The agreement provides the company with capital and operating expense support from New York economic development agency Empire State Development totaling $38.8 million over 3.5 years, in addition to low-cost hydropower from NYPA.
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For its part, Alcoa will be required to employ at least 600 full-time equivalent employees throughout Massena West. The company will offer a voluntary retirement package to eligible employees.
Alcoa had said earlier this month that it would curtail operations at the smelter at its Massena West plant. This would have eliminated at least 487 jobs, leaving approximately only 217 positions for other functions at the plant.
With the Midwest transaction aluminum price down 30 percent year-to-date, Alcoa will continue with its other previously announced curtailments of uncompetitive smelting and refining capacity.
The agreement to save the Massena West smelter from a similar fate was announced by Governor Andrew M. Cuomo and U.S. Senator Charles E. Schumer.
Chairman and Chief Executive Officer Klaus Kleinfeld said in a release that “Senator Schumer and Governor Cuomo have been tremendous allies for Alcoa’s Massena operations for many years and we thank them for their continued support.”
Governor Cuomo said in the release that “This agreement strengthens an essential part of the North Country economy and saves hundreds of jobs in the region.”
The Governor also noted that this agreement also protects the State’s investments, ensuring that taxpayer dollars are spent wisely and that Alcoa lives up to its promises. The agreement includes up to $40 million in penalties should Alcoa breach or terminate the agreement. The amount of the penalty would gradually decline by the end of the term.
The deal changes the existing contract between Alcoa and the New York Power Authority, providing various state incentives to Alcoa, and includes significant financial penalties if the company defaults or terminates the deal early. Also, the low-cost power rate will be increased as the price of aluminum increases in the global metals exchange market.
Senator Schumer said in the release that “The agreement that Governor Cuomo and I forged with Alcoa is a major victory for the North County and more importantly the hard working, extremely productive workers at the Alcoa factory in Massena.”
Empire State Development President, CEO and Commissioner Howard Zemsky noted that “As the largest private-sector employer north of Syracuse, we recognize the vital role Alcoa plays in the North Country.”
NYPA President and CEO Gil C. Quiniones likewise said that “Competitively priced clean power from our St. Lawrence-FDR hydroelectric plant in Massena is a critical tool for attracting businesses and creating economic development in the North Country.”