Last Wednesday was a sad day for Kurri’s Hydro Aluminium, after the announcement that an estimated 150 employees would be made redundant with plans to cut the smelter’s capacity by one third.
The announcement coincided with Tomago Aluminium also confirming a major restructuring that will cost at least 100 jobs.
A weak macro-economic environment combined with low metal prices and an uncertain market outlook is the reason given for the company’s decision to scale back its production, and close Potline 1 as soon as possible.
The Kurri plant currently employs 600 workers, with three production lines and a total annual production capacity of 180,000 metric tons.
Norsk Hydro senior vice president, Olaf Wigstol, made the announcement in response to the demanding situation, adding that the strength of the Australian dollar relative to the US has severely hurt the company.
“Unfortunately we’ll do what needs to be done, but it is not something that we want to do,” Mr. Wigstol said.
“There are a lot of talented people in Kurri, which is needed, but we have to look at the logistics of it. We’re looking at all different types of jobs from one complete line; a broad picture equally between white and blue collar workers.”
Member for Cessnock Clayton Barr described the announcement as devastating, adding that the long-term effects this decision will have on the wider community.
“This is a difficult day for at least 150 families,” Mr. Barr said.
“I appreciate the open, honest and frank discussions that the company has had with workers over these past months.
“Hydro is a place where workers actually loved to work and have stayed for very long periods – often more than 25 years.
“Equally significant, are the spin-off effects from this decision – the other work, sales and contracts that happen because you have these 150 people employed. I am talking about the petrol station, the hair dresser, the truck driver the hamburger joint, the bowling club – everything is affected.”
Consultations between newly-appointed CEO Egil Fredriksen and unions in relation to the curtailment have already taken place and will continue.
Hydro Executive Vice-President Hilde Merete Aasheim added that the company is committed to ensuring a transparent and rational process and will “continue to stay in close dialog with all affected stakeholders, including employers, unions and the local community”.
The smelter, which has been owned by the Norwegian company since 2002, has been struggling to secure a new electricity contract after a deal with Delta Electricity was scrapped by former NSW treasurer Eric Roozendaal.
Mr. Barr echoed his dissatisfaction with the current situation. “I am frustrated with both the former Labor government and this current Coalition Government that Hydro still has no certainty of electricity beyond 2017,” he said.
“Barry O'Farrell himself stood with Hydro and said that his Government would fix the problem if elected in March 2011. Well that was almost 12 months ago."
Mr. Wigstol would not speculate on the possibility of a complete closure of the plant, however Hunter MP Joel Fitzgibbon, who met with Hydro executives on Thursday, has warned that this lay off may be just the beginning.
“We had some sense for a period of time that this was coming,” he said. “But alarmingly, this may only be stage one. Because world aluminum prices remain very low, and he Australian dollar remains very high, the viability of the entire plant is under a cloud.”
Employee compensation will be based on individual enterprise agreements, with the company hoping for a quick resolve.
Kurri District Business Chamber president Rod Doherty, a former Hydro employee, said the town will survive, having learned a harsh lesson in 1967 when the coal mines closed.
“We’re not a one-industry town,” Mr. Doherty said.
“We have the Hunter Expressway, and we’re working on an industry prospectus.
“This is the most opportune time to push for the HEZ (Hunter Economic Zone) development.”
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