Aluminium producer Alcoa confirms decision to close Point Henry smelter, rolling mills

Updated

Aluminium producer Alcoa has announced it will close its Point Henry smelter and two rolling mills in Australia, putting almost 1,000 people out of work.

Alcoa employs 500 workers at the Geelong smelter and about 480 at the rolling mills at Geelong and at Yennora, New South Wales.

The decision to shut the facilities was made at a meeting of the Alcoa Australia board this morning.

Alcoa Australia chairman and managing director Alan Cransberg briefed his employees and called it a sad and significant moment in the history of the company.

"Sixty per cent of employers have been with us for 10 years or more," he said.

A lot of the workers half expected this, [but] it is still a shock when it gets announced. Alan Cransberg, Alcoa Australia chairman

"We are a large part of the Geelong community and we are proud of the contribution we have made over 50 years.

"A lot of the workers half expected this, [but] it is still a shock when it gets announced."

The smelter will be closed in August and the rolling mills will wrap up operations at the end of this year.

Alcoa says a comprehensive review of the 50-year-old smelter says it has no prospect of becoming financially viable.

The company is closing the rolling mills because of excess capacity.

"We recognise how deeply this decision impacts employees at the affected facilities and are committed to supporting them through this transition," company chief executive officer Klaus Kleinfeld said.

"Despite the hard work of the local teams, these assets are no longer competitive and are not financially sustainable today or into the future."

Alcoa's decision disappointing but predictable: Hockey

Federal Treasurer Joe Hockey says Alcoa's decision is disappointing but it was predictable because the company knew in 2012 that the plant was not financially viable.

"The Labor government gave them $40 million and they closed two years later," he said.

"The fact that they're closing two years after receiving a $40 million government grant illustrates the fact that you've got to be very careful with taxpayers' money."

Mr Hockey says no-one should be despondent about the closure.

"This is one of a number of businesses that will pass, but many other businesses will open," he said.

"If you get entirely despondent about one business closing, you will ignore the fact that at any one time other businesses are opening and they represent the jobs of tomorrow."

Australian Workers Union (AWU) national secretary Paul Howes says there is nothing the Federal Government could have done to stop Alcoa from closing the facilities.

Mr Howes says it is the darkest day for the base metals sector since the Newcastle steelworks closed 17 years ago.

He says what is needed now is cooperation.

"This is not the fault of the Government. Let's be blunt [about] that. There is nothing the Government could have done to stop this announcement," he said.

"I'm not interested in scoring political points on this front.

This is not the fault of the Government. Let's be blunt [about] that. Paul Howes, AWU national secretary

"What governments need to do is develop a pathway forward. We need a plan."

Alcoa will try and find a buyer for the Anglesea coal mine and power station.

It supplies about 40 per cent of the power needed for the smelter and can operate as a stand-alone facility.

The Portland aluminium smelter and the company's bauxite mining and alumina refinery operations in Western Australia will continue to operate as normal.

"Our operations in Western Australia are amongst the best in the world and we will do all we can to ensure our remaining facilities, including the Portland smelter, will survive this downturn and remain sustainable into the future," he said.

Mr Cransberg says it was a difficult decision to make.

"Everyone has worked hard to improve the competitiveness of the smelter and rolling business," he said.

"They are a part of a proud history of Alcoa in Australia over the last 50 years."

Geelong becoming an 'economic disaster zone'

The closure will reduce Alcoa's global smelting capacity by 190,000 metric tonnes and cut can sheet capacity by 200,000 metric tonnes.

Alcoa employs approximately 5,200 people across Australia in its mining, refining and smelting operations.

The news is another body blow for Geelong's economy.

Last year Ford announced it will stop making cars in Australia in 2016, resulting in the loss of 600 jobs.

Shell has been looking for a buyer for its oil refinery on Corio Bay since April 2013, leaving at least 450 staff with an uncertain future.

Another 300 jobs will go when Qantas closes its maintenance facility at nearby Avalon Airport this year.

Boral Cement shed about 100 jobs last year and Target cut 260 staff from its Geelong headquarters.

Job prospects here in Geelong and in manufacturing more generally in Geelong, are terrible, and there is no way to sugar coat that. Ben Davis, AWU

The AWU's Ben Davis says Alcoa's closure will have a catastrophic effect on Geelong.

"Job prospects here in Geelong and in manufacturing more generally in Geelong are terrible and there is no way to sugar coat that," he said.

"Geelong is very rapidly becoming a bit of a manufacturing economic disaster zone and we are obviously very keen to speak to the state and federal governments about belatedly stepping up and providing a jobs plan and some direction for the future down here."

Victorian Premier Denis Napthine says it is a sad day for Alcoa workers and the Geelong region.

He has vowed to work with the company, staff and the community to help manage the transition.

"Alcoa as a company has had a long track record of good relationships with their employees," he said.

"I'm sure Alcoa will accept their corporate responsibility to look after employees in any situation."

Geelong Mayor Darryn Lyons says his thoughts are with the workers, describing the news as "devastating."

"We didn't expect it to be this fierce and this sharp, this tsunami, that's hit the city," he said.

"This is a supply chain situation as well, it's not only the 600 or 700 jobs that are going to be going here at the end of the year, there's a lot of supply chain families that are going to be effected by this as well ."

The Dr Napthine says he will ask for federal funding to help workers affected by the Alcoa closure.

"We will make representations to the Federal Government to put funding up to assist in the continued diversification of jobs and opportunities in Geelong," he said.

"This is a particularly sad day for those people who've worked a lifetime at Alcoa."

'$300m king hit in Geelong '

Federal Opposition Leader Bill Shorten says he is shocked by the announcement.

"I know how big this announcement is for thousands of people," he said.

"We do have a jobs problem in Australia in manufacturing.

"I don't think anyone could have predicted the scale of some of the announcements that we have seen.

He says he hopes there is no more bad news down the track.

"We all get that the economy is softening, we get that there's economic troubles," he said.

He says now is the time for a plan in manufacturing.

"We recognise that all the people here, take them out of the economy, that's a $300 million king hit in Geelong."

The Opposition Leader Daniel Andrews says Victoria and its workers desperately need a jobs plan.

"We're slipping. Victorians deserve a lot better than seeing entire industries leaving our state, factories closing, jobs going almost every single day," he said.

Yennora closure a blow for western Sydney

The New South Wales Opposition says the closure of Alcoa's Yennora plant by the end of the year is a significant blow for western Sydney.

Up to 180 jobs are set to go in Sydney as the company shuts up its Australian aluminium facilities.

Labor leader John Robertson says the State Government needs to provide support for the workers to help them transition to new jobs.

Steve Roberts, a worker at Alcoa's Yennora plant, is concerned about how he is going to support his three young children.

"We've been expecting it but obviously it's a big blow," he said.

"I found out from friends at work who've been watching the news, so I haven't heard from the company yet."

Topics: unemployment, geelong-3220

First posted