After more than 50 years of economic ups and downs, employees at the Columbia Falls Aluminum Company are bracing for another possible round of layoffs. But company representatives and economists say, just by keeping the doors open at all, the plant is doing better than most.
On May 21, the company gave a 60-day notice of pending layoffs and announced it was considering reducing its aluminum production at the smelter by as much as two-thirds. It’s uncertain yet how many people could lose their jobs or what exact production cuts would be made, Haley Beaudry, CFAC’s manager of external affairs, said. Since it’s a union plant, layoffs are based on seniority.
About 350 people work at the plant, including hourly and salaried workers, he said, and approximately two-thirds of them are union members. The plant is currently operating three of its five aluminum potlines.
“The price of power is simply too high for us to see success,” Beaudry said. “That, along with high material costs and stagnant aluminum prices, means we have to look at limiting some of the production.” Conditions could change before the 60 days are up, he added, but that “seems unlikely right now.”
Under a five-year contract with Bonneville Power Administration, CFAC buys its power on the open market and then that cost is partly subsidized by BPA. Projections for power over the next year are around $100 per megawatt hour. While the price of aluminum has also climbed, Beaudry said, it’s not enough to keep pace with soaring electricity and material costs.
The 40-acre aluminum refinery, built in the 1950s to take advantage of cheap hydroelectric power from the then new Hungry Horse Dam, has had to overcome weighty obstacles in its 53-year history: four different corporate owners, legal battles over profit sharing, a brief strike, fluctuations in production and staffing and chronic strains to find affordable power. At a low point, in 2001, the plant laid off 245 workers and shutdown for 13 months before the power market stabilized.
It’s a volatile workplace that plant employees have become somewhat accustomed to, speaking matter-of-factly of the times and dates when their jobs, too, were cut.
“In this day and age, there’s no secure job and here you know that the company can be hurt by a lot of things it can’t really control,” Dave Toavs, president of the plant’s union, the Aluminum Workers Trade Council, said. “Still, it’s a bad feeling – even when you have a pretty good idea it’s coming, and you usually do – when you look at the information board and see your name on that list to go.”
In his 29 years with the company as an industrial truck mechanic, Toavs has been laid off six or seven times, he says, for as little as two weeks and as long as 11 months.
By many accounts, though, the fact that the local plant has managed to survive at all is an impressive feat.
Historically, the Pacific Northwest, fueled by a substantial amount of low-cost power, was a mecca for primary aluminum smelters. That began to change in the mid-1990s when – in response to increased demand from public utility customers – providers drastically reduced sales to aluminum aluminum companies and other industry customers.
When the Columbia Falls plant shut down in 2001, it became the ninth of 10 Pacific Northwest aluminum plants to halt production at that time rather than continue paying the West Coast’s wild, spiraling energy costs. Since then, all but the one in Columbia Falls and Wenatchee, Wash., have stayed closed and many of the old plants have been dismantled.
“I think the important thing here is the very fact that they continue to be in operation and for as long as they have,” Paul Polzin, director of the University of Montana’s bureau of business and economic research, said. “One by one these plants have gone down, and Columbia Falls for a number of reasons has been successful enough to hang on.”
Support from the community and a good working relationship between the union and ownership are two of the reasons for the plants success, Toavs said. “People here feel an ownership in the plant and do whatever it takes to keep it going, and that means sitting down and working things out with the owners. We’ve made sacrifices that employees at other plants haven’t, but, then again, we’re still working and they’re not.”
Still, making cuts during hard times to keep the plant alive takes a toll – certainly on plant employees and their families, but also on the broader community. CFAC is consistently ranked as one of the county’s top 10 employers and pays competitively, Polzin said, so a job lost at the plant probably means a job lost elsewhere.
“The aluminum workers aren’t going to be spending as much money at Safeway or other local businesses,” he said. “That reduces the number of workers at Safeway, the number of workers at the gas station, the number of workers at the local restaurant – it’s a multiplier effect.”
And there are other – harder to measure – effects.
“You can understand why it needs to happen, but still if there are cuts it’s depressing,” Toavs said. “You spend a lot of time with these guys. It’s very much like a family, so even if you’re not laid off, it’s hard to take when the guy you’re used to having next to you every day is.”