Noranda To Lay Off Up To 200
New Madrid, Mo. – Officials who represent the region’s largest employer today announced layoffs that will affect 125 to 200 area workers.
Noranda President and Chief Executive Officer Layle K. “Kip” Smith said job cuts are related directly to a decision by the Missouri Public Service Commission (PSC) to deny competitive power rates to the New Madrid smelter.
Layoffs are expected to come in phases during the next six months, Smith told a crowd of employees, dignitaries and press. Those cuts will reach across all sectors of the company’s staff, including both administrative and plant personnel, he said.
In addition to eliminating jobs, Smith said the company will suspend a $30 million capacity expansion project at the plant.
“Unfortunately, this means that 60 construction and engineering jobs will be lost from the Bootheel,” Smith said. “We are exploring the opportunity to move the construction of our $45 million state-of-the-art rod mill to a neighboring state.
“While we are committed to building that rod mill and are making progress in its construction, there is a window of opportunity for us to move the rod mill to a site other than New Madrid,” Smith continued. “If our smelter is no longer sustainable in New Madrid it makes no sense to locate the rod mill here.”
If the proposed mill moves out of state, so do additional construction and engineering jobs, the CEO said.
Smith reminded those in attendance that competitive power rates are essential to Noranda’s future, and that historically, smelters close because the cost of power becomes an overwhelming burden.
“Thirty years ago there were 32 smelters in the United States,” he said. “Today there are nine.
“In every case, the primary cause of each smelter closure was unaffordable and uncompetetive power.”
Stan Ivie, USW Local No. 7686 President, said the job loses were avoidable. “Had the PSC approved the compromise and lowered our rate, every single one of these employees would have a job today,” he said.
Smith said Noranda plans to file a request with the PSC, whose board includes members from primarily the Saint Louis region, that asks for a re-hearing and reconsideration of its decision that denied the plant’s request for a decreased power rate. “We believe this request is appropriate and necessary because a compromise agreement between Noranda and members of all the other consumer classes in the State of Missouri was not fully considered,” by the commission, Smith said.
He added that if the rehearing is successful and Noranda secures a competitive power rate, job cuts may be slowed or minimized.
Calling the forced layoffs “heartbreaking” the CEO said job cuts are necessary to “help us remain competitive” in the near term.
“At the same time, the long-term future of this plant depends on our ability to secure an affordable and competitive power rate,” Smith said.
The CEO and others in attendance called on state leadership to aid in the negotiations process. One such voice was that of Dist. 149 Rep. Steve Hodges.
“Some of the employees at Noranda are second and third-generation workers at the plant,” Hodges said. “These men and women work hard 24-hours a day making products that improve the lives of people around the world.
“The State of Missouri, under the leadership of Gov. Nixon, needs to provide Noranda with an affordable power rate so that these employees can support their families for years to come.”
25th District Missouri Sen. Doug Libla noted manufacturing “has long been a key part of Missouri’s economy,” but is in a state of flux.
“Escalating electric rates have put good-paying jobs at risk in Southeast Missouri,” he said. “For example, Noranda and the 900 people they employ.
“The retention of existing companies must be as important as attracting new ones, he added. “Gov. Nixon and his administration should become engaged and ratchet up their effort to find a solution that meets the needs of this critical employer.”
From Washington, U.S. Representative Jason Smith released a statement saying “With over 900 employees, Noranda is a huge part of Southern Missouri’s rural economy. The 200 jobs eliminated today were good-paying and came with benefits. Tonight, 200 families will have to decide how they are going to make ends meet. I will continue to work with all parties to see if a solution can be reached and future job losses can be prevented.“
Noranda’s CEO added his voice to those who called on the governor for leadership. “Working together with the other consumers in Missouri and with the leadership of Gov. Nixon, we can ensure the economic future for 900 families through Noranda jobs in the Bootheel.”
The Company expects to file its request with the PSC by Sept. 18, reports indicated Tuesday.