HANNIBAL - State tax breaks could be part of a plan to keep the Ormet Corp. Primary Aluminum Reduction Plant operational beyond this year, as the company faces electric bills that may increase by about $20 million per year.
"The last thing this area needs is to lose more jobs," said Tom Byers, president of United Steelworkers Local 5724 at Ormet, confirming that 102 union workers received layoff notices last month.
He said 10 of these workers have since returned to the job, but a Worker Adjustment and Retraining Notification Act notice the company filed this summer states Ormet may lay off nearly 1,000 employees by the end of this year. Declining market conditions are part of the reason Ormet may need to cease operations, but the main problem seems to be the recent ruling by the Public Utilities Commission of Ohio that will allow American Electric Power to increase Ormet's electric bills by about $20 million per year.
"We are doing everything we can to make sure people know how important it is to keep this plant going," Byers said. "We are reaching out to (Ohio) Gov. John Kasich to see if there is anything he can do."
Byers said he collected more than 2,500 signatures for a petition and accompanying letter that he mailed to Kasich in seeking the governor's help to find a solution for Ormet.
"Ormet is by far the largest employer and tax contributor in rural Monroe County. To lose these jobs would be devastating. Please get involved and do all you can to preserve our jobs and our communities," the letter to Kasich reads.
Kasich's representative directed questions concerning Ormet to JobsOhio, a private, non-profit entity created by Kasich and the Ohio General Assembly last year to "lead the state's economic development efforts." It lists the desire to "attract and retain" jobs as some of its business.
"Ormet sent us a proposal earlier in the year with some ideas, but we did not feel we could go along with that at the time," said JobsOhio spokeswoman Laura Jones. "They have sent in a new proposal, and we are reviewing that proposal."
Though Jones said she could not discuss the specifics of the Ormet plan, Jones said tax breaks and "incentives" could be part of such a proposal.
PUCO spokesman Jason Gilham said the electric rate matter is resolved at this point, but said any change in the power costs for Ormet would have to be approved by his office.
Ormet Chief Executive Office Mike Tanchuk could not be reached for comment regarding the status of the plant Tuesday.
Last month, Ormet issued an additional WARN notice for 250 employees at the company's Burnside, La., aluminum refinery. These reductions come primarily because of the shutdown of two of the six potlines at Hannibal.
As Ormet moves forward, the aluminum producer has hired Evercore Partners to help determine its long-term course of action. According to the firm's website, Evercore handles "mergers and acquisitions; divestitures and restructurings." A potential divestiture would involve selling some of the company's assets. As part of Ormet's 2004 bankruptcy filing, the company closed and sold its former rolling mill to the south of the reduction plant.
"We are just hoping for the best," Byers said. "You are always going to have fluctuations in the aluminum market, but the electricity costs are a bigger issue."