BADIN — It’s been about half a year since Alcoa’s Badin Works smelting
operation got an ultimatum: Get the plant costs down or close.To continue operating, Alcoa’s Primary
Metals Division in Knoxville, Tenn., said the local plant had to cut controllable costs by
4 cents a pound by Nov. 15.
They made it.
In August, when the plant was
about eight weeks into a 21-week, cost-reduction program, Badin Works Manager Bruce Cox
called a meeting of about 40 government, education, health care and business officials to
explain the challenge the plant faced and ask others to partner with the company in
finding ways to lower expenses.
A large sign outside the plant
tracked their progress, a penny at a time, toward cutting costs.
Cox promised United Steel Workers
of America no Badin workers would be laid off in the process.
In October, Alcoa and the union
agreed on a plan that includes a voluntary retirement offer to eligible employees. Union
Local President Robert Smith said the agreement would create opportunities for the plant
and its future.
Cox said 80 employees are taking
advantage of the retirement package, which pays each of them $400 a month until they reach
age 62. The offer has no cap on other income the early retirees may earn.
“Many of them already have
their own small businesses,”Cox said, “and they can begin a second career if
they want to. There’s no limit.”
The early retirement plan is only
one cost-cutting action in the works. The company is changing many work practices to make
them more efficient and combining some jobs. “About 60 percent of the remaining
employees now have higher paying jobs and we’re still saving money,” he said.
About half of the company’s
cost-cutting is not labor related.
For instance, the plant has
negotiated new arrangements with some suppliers. The human resources department is
exploring ways with Stanly Memorial Hospital to cut health care costs, Cox said, and the
plant is working with Stanly County Community College to upgrade work skills. He said they
are also talking with state and local officials about possible tax breaks, but nothing is
settled.
Cox said if Badin Works maintains
its lower operating cost of 4 cents per pound for the year 2000, Alcoa will continue to
operate Potline 2 at Badin. Assuming the plant can maintain those lower operating costs,
the plant will continue operating at least until the current agreement between Alcoa and
the union expires.
“I’m really
thrilled,” Cox said. “I think we’ll become the model for controlling costs.
The plant is well positioned, and the future of Badin looks very good.” |
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