By Jimmy Nesbitt, Evansville Courier & Press
Alcoa Warrick Operations is laying off about 100 people, citing an unprecedented drop in aluminum prices and a number of other financial issues.
The layoffs were announced Thursday. They include contractors, salaried and hourly workers, said Kevin Lowery, Alcoa's director of corporate communications.
The positions will be cut over the next year.
"Some will be achieved through attrition," Lowery said.
The layoffs are part of a companywide initiative to reduce costs, conserve cash and adjust and align production with current demand. A sharp decline in aluminum prices has happened as market demand for aluminum softened, according to a press release from the company. The company also is struggling with high input costs and the ongoing financial and credit crisis that is affecting businesses worldwide.
Lowery said he couldn't predict whether there would be additional jobs cuts.
"It's difficult to say what's going to happen with the global economic environment," he said.
The price of aluminum on the London Metal Exchange has fallen from $3,300 a ton in July to $2,150 a ton. The drop in prices during the third quarter of this year was among the largest declines in industry history, according to the release.
"It is projected that as a result of the high costs and low metal price, more than one-third of all smelters in the world are losing money," according to the release.
Alcoa recently shut down a smelter in Rockdale, Texas, that wasn't profitable because of overall market conditions.
"The longer term view on aluminum continues to be strong with consumption of aluminum still projected to nearly double by the year 2017," according to the release. "However, the short-term situation for many smelters in the world is one of survival."
The Warrick County plant employs about 2,150 people and began operations in 1960. Lowery noted that Alcoa recently celebrated its 120th anniversary and plans to continue to have a strong presence in Warrick County.
"We want to be there for another 120 years," he said.