Adamstown -- Every minute of every day since 1970, the Alcoa Eastalco smelter has churned out aluminum for the world's market.Today, the plant begins shutting down, victim of a market that requires huge amounts of cheap power to keep production economical.
Even in a deregulated environment, created to spur competition among power suppliers and reduce costs, no energy company the aluminum smelter approached could match the rates of Eastalco's special contract with Allegheny Power. That contract expires on New Year's Eve.
Plant Manager Brian Dahlberg and spokesman Earl Robbins did not return calls Friday.
Eastalco has been paying about $86.8 million for electricity each year. With the end of a more than decade-long contract, Allegheny wants to hike the plant's rates by 82.5 percent, or $72 million. Alcoa and plant representatives have said that's 40 percent higher than the global average.
Now the molten glow of the giant smelting pots will dim, waiting for energy costs to drop low enough to restart the plant. Layoff notices went to 600 workers in October; many left rather than wait for the end. About 100 workers will remain as the 400-acre plant curtails production.
Then 25 will stay on to maintain a once-thriving manufacturing giant, which used enough electricity to light Baltimore city and produced up to 195,000 metric tons of metal a year.
"If a foreign company, which this is, can produce a pound of aluminum cheaper in another country than they can in this country, those jobs were always going to be in jeopardy, a consequence of a global marketplace," said Delegate Rick Weldon, R-Frederick , who represents the district where Eastalco is located.
Hibernating the plant will cost $14 million, impacting Alcoa's fourth-quarter results this year. Alcoa has moved much of its aluminum production overseas, favoring regions supplied with cheap, environmentally friendly hydroelectric power.
"It's adjusting to the realities of a global marketplace, and that's what we're seeing here," said state Sen. David Brinkley, R-Frederick . "When Alcoa can open smelters in Russia and Indonesia and not pay attention to Maryland's environmental restraints, it puts this factory at a competitive disadvantage."
Alcoa, which owns 61 percent of the Eastalco operation, was forced to close the plant because of inability to find a cheap power contract, said Geoffrey Cromer, Alcoa vice president operations -- U.S. primary metals, in a November statement.
Alcoa will continue to seek a favorable power contract and continue its lobbying efforts with government and local officials, he said. But help from the state legislature may be out of reach.
"A legislative solution has not succeeded yet, and we have received no indication that, if we were to get a successful vote, that it would be signed into law," Mr. Cromer said.
Many local lawmakers think the legislation submitted by Eastalco and Alcoa is untenable. The draft bill would force Allegheny to provide power to the plant for five years during the search for an alternative, cheaper power supply.
Delegate Galen Clagett, D-Frederick , initially supported Eastalco's proposal and said he would file the bill. But he has cooled to the idea, citing several unanswered questions, including Alcoa's commitment to find a power source in the interim. He last talked about Eastalco a week ago with a consultant employed by the plant.
"Frankly we haven't heard from the company, and I was in direct contact with some of their representatives, and I just don't have an idea right now where it stands, so I'm still waiting," Mr. Clagett said.
The closure may not be a fait accompli, he said. An investment the size of Eastalco would be difficult for Alcoa to walk away from.
"This may be a shakedown sort of a thing so people know they are serious," he said.
But he would be prepared to submit a bill if he sees an agreement among Eastalco, Allegheny and the state that makes sense, he said.
The state's Department of Business and Economic Development has also backed away from the bill, and has been reluctant to help Alcoa unless they help the Eastalco plant themselves. DBED officials did not respond to a request for comment.
But in a session that will precede a bruising election-year match between Republicans and Democrats, legislators may be unwilling to side with either Alcoa or Allegheny.
"The feeling there is that it's like refereeing a fight between two corporate giants, and the one solution is to have Maryland taxpayers fit the bill, and I don't think there's any interest in doing that," Mr. Brinkley said.
He has had no discussions with plant officials since October.
Other members of the county delegation contacted Friday said recent communication from plant representatives had been sparse or nonexistent. State Sen. Alex Mooney said he had heard nothing, although he hoped the plant could stay open until the session convenes in January. Lawmakers wanted to help, although legislation may not be the only solution, he said.
Mr. Weldon had heard "nothing, not a word," he said Friday. If legislation were considered, work on it would not begin until Jan. 11, the opening day of the Maryland General Assembly and would not conclude until the governor's bill signing in May.
"Anything that happens before then is posturing and window dressing," Mr. Weldon said.
Like DBED, he wants to see Alcoa make a "substantial commitment to protecting jobs in southern Frederick County" before even considering legislation with a special rate cap. If the company could guarantee a 10-year job-protection commitment, Mr. Weldon said, "I'd drop the bill."
But, "I've never gotten that, and I'm not going to hold my breath waiting for it."
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