This much seems certain: Alcoa Warrick Operations will shut down its aluminum smelter by the end of March, reducing its workforce by about a third.
It also seems certain that the smelter shutdown will have an economic impact on the Tri-State. Alcoa is a major employer, and also a major taxpayer. Any big change at Alcoa is bound to have ripple effects.
The smelter shutdown will reduce Alcoa's workforce by 600 jobs. The plant's rolling mill and power plant, which employ 1,235 people between them, will remain in operation.
But exactly how that impact is felt remains to be seen.
Most of the hourly workers at Alcoa are members of United Steelworker Local 104. Union representatives began meeting with Alcoa last week to work out details of the shutdown, including who loses their job as well as transfer opportunities.
No one would argue that a layoff, especially one of this size, is a positive development.
"It certainly makes us have pause. We're concerned about the 600 people that (will lose) their jobs," said Larry Taylor, executive director of economic development organization Success Warrick County.
But Taylor, and others, say they're optimistic that the displaced workers will rebound.
"I think we'll be able to place most of these people — I hate to jinx myself, but — fairly easily," said Jim Heck, executive director of Grow Southwest Indiana Workforce. The organization, which works with both job-seekers and area employers, is part of the Indiana Department of Workforce Development.
In just the first few days after the Alcoa news broke, Heck said his office already received inquiries from at least 15 other companies.
"There are a lot of employers that are very interested in these workers," Heck said.
Part of this interest, Heck said, is because manufacturers have a lot of job openings right now.
"This group of employees has the work ethic that employers are looking for," Heck said. "They've worked in pretty hard conditions, and they've worked many hours."
One concern, Heck said, is that the displaced workers might not find a job that matches their current pay.
"Alcoa tends to pay better than other employers in the area."
Local 104 members at Alcoa generally earn between $19 and $28 per hour, said Local 104 President David Willett.
Workers might also have to go through some skill-specific training to qualify for their next job, Heck said.
Alcoa's smelter shutdown will also impact workers outside of the operation.
The plant's power plant includes four coal-fired generating units, three of which are dedicated to powering Alcoa's plant.
After the smelter shuts down, the Alcoa plant won't need as much electricity, said company spokesman Jim Beck.
That means Alcoa won't need as much coal to fire its plants, Beck said.
Alcoa gets its coal from the Friendsville Mine in Wabash County, Illinois, and from the Liberty Mine in Warrick County. Both mines are operated by Evansville-based Vigo Coal.
On Tuesday, Vigo notified state officials that it will be laying off 66 employees by March 26 or within two weeks after that.
Vigo did not name Alcoa in the notification letter it sent the state. But Vigo did say the layoff was because of "its customer's decision to idle part of its operations resulting in a significant reduction in the amount of coal it will purchase from Vigo."
Tax Impact
Tax impact is another issue to consider.
Alcoa has been a major Warrick County taxpayer for decades.
In 1957, while Alcoa was still building its Warrick County plant, the county was already excited about the project's tax implications.
Warrick County Treasurer Woodrow Holder told the Evansville Press in August 1957 that Alcoa's arrival had put the county "in better financial shape than ever before."
"We're pretty well sitting on top of the earth," Holder said.
And in 1967, when Alcoa made a $758,265 tax payment, the news made headlines. A Nov. 9, 1967 Evansville Press story called Alcoa's payment the "biggest single tax payment in the 154-year history of Warrick County."
As Alcoa has grown, so have its tax payments.
Last year, Warrick County received $5.8 million in tax payments from Alcoa, said Warrick County Treasurer Pat Brooks.
Tax payments include taxes paid on real property — real estate — and on personal property — the equipment inside the buildings.
Brooks said the smelter shutdown will probably impact Alcoa's county tax payments, but the issue is complex.
"It's not an easy question to answer," Brooks said.
Alcoa owns more than 500 parcels of taxable property in Warrick County. Some of these parcels are part of the aluminum plant. Other parcels include buffer property near the plant; or coal mines.
To get a sense of the tax impact, Brooks said, you have to know which parcels will specifically be affected by the smelter shutdown. And that, she said, will take some analysis.
"How do you take it apart?"
Alcoa Warrick Operations spokesman Jim Beck said the plant will remove some property and equipment after the smelter shuts down.
"We are assessing the tax impact of that and we'll make sure we communicate that promptly to local officials," Beck said.
But Alcoa will also bring in some new equipment. Though it will no longer create aluminum through smelting, the plant will need to melt finished aluminum for use in its rolling mill.
That melting equipment will be newer than the smelting equipment, economic developer Taylor said. That means taxes paid on the new equipment will be higher because it hasn't fully depreciated.
"It could be a wash," Taylor said of the personal property tax impact.
Whatever the impact is, it won't show up for a while yet.
Warrick County Assessor Sarah Redman said any change in Alcoa's tax bill will show next year. And that tax bill isn't payable until 2018.
What's Next
Looking ahead, Taylor said he prefers to take a "glass half full" view on Alcoa's future prospects.
Fluctuating aluminum prices — something outside of Alcoa's control — caused the smelter shutdown, Taylor said.
But the remaining part of Alcoa Warrick Operations, its rolling mill, will be less sensitive to the metals market.
"Your destiny is somewhat within your own control. And if you have a group of resourceful people like I know they have at Alcoa Warrick, I kind of like those odds."