Ormet Workers Given Hope For The Holidays
“There are so many things out there that are not true,” stated Ormet’s Union Rapid Response Coordinator David Cain Friday afternoon during an interview with the Wetzel Chronicle.
It’s the negative part that’s out there, agreed Local Union 5724 President Tom Byers, referencing recent reports that Ormet has been auctioning off its materials.
Friday’s interview took place at United Steelworkers Local #5724 headquarters, where the walls of President Byers’ office are filled with photos and newspaper clippings related to previous battles the decades-old plant has fought, battles that probably, at the time, seemed too much to overcome. For instance, one headline from a past year suggested that the plant would be closed by Christmas.
Yet the plant has prevailed each time, and Byers and Cain want it known that the fight is not over this time.
Byers reported there had been a buyer for the anodes and copper rods. “They were able to get a few more million dollars out of them.” Byers stated that the investors were after cash right now. “The products they auction are not going to keep us from restarting. People get scared when they see that materials are being auctioned off, but it’s all replaceable stuff.”
“It’s not over until we get the word they are cutting buildings and cutting the bussing up.”
Byers added that the aluminum plant still even has a small chance if the bankruptcy case goes to Chapter 7. “It’s my understanding they cannot do that right now though,” he said.
Cain and Byers are both concerned about another misunderstanding surrounding Ormet: the $308 million in breaks that AEP and PUCO have both repeatedly referenced that were part of the 2009-2018 agreement AEP made with Ormet. “These power breaks are based on inflated prices to a 10-year contract that is only halfway through,” Cain noted.
Byers stated that a lot of the trouble actually stems from this 2009 electric contract with AEP, adding “An Ormet official had stated at the time that if the price of aluminum tanks for a long period of time, we are going to have major problems with this contract.”
However, Byers adds: “But really, what other choice did they have? Shut the plant down while the aluminum prices are high, or get a power agreement, the only one offered to them? This was the only choice they had. Run the place or shut it down.”
“One thing that has to be understood that we have presented before the bankruptcy courts . . . We were going to be heading into this 2009-2018 agreement, we would’ve been at 63 dollars per kilowatt an hour this past summer . . . If you look up the national average for industry aluminum . . . Companies using power generated with coal are paying 37 to 42 dollars a kilowatt hour. AEP is high on their power rates.”
Cain states that AEP claims that to “give Ormet this break, they go after other customers.” However, “Our electric rates were so inflated . . . So they give us $308 million dollars, but they got it from us from somewhere else.”
Furthermore Cain adds that customers will have to pay much more once AEP completely loses one of their largest customers.
Cain stated that Ormet approached the Public Utilities Commission of Ohio and requested a “rate that they could run with . . . Ormet put their best foot forward and requested $45.89, and they also asked PUCP to back the contract from 2018 to 2015. This would give Ormet 18 months to get the power plant built . . .” Cain stated the power plant would take 400 to 500 construction workers to build and would create 100 good-paying jobs.
However . . . “PUCO came back with a $50 per megawatt hour frame,” Cain stated, adding that it was also stipulated that Ormet had to stay in their AEP agreement. “The investor said they were not going to put millions of dollars into a power plant that we can’t get power out of until 2018.” Cain and Byers describe PUCO’s ruling as “unacceptable.”
“It was very unprofessional,” Cain stated, explaining that “PUCO slammed Ormet’s management team and put all the blame on them . . . This is not the management team’s fault. They have done an excellent job running Ormet.”
“If it wasn’t for the management plan, we would’ve been at this point sooner,” Byers stated. “They tolled the prices of metal. They were smart enough to stay in their tolling agreements and stayed at a set price. We stayed the course. The management saw a viable future.”
It appears as if the only thing holding back the plant right now is the fact they are still tied in the power agreement with AEP.
“Wayzata wants to build this gas-powered plant to supply the plant with electricity.”
Cain stated that this would save $10 a megawatt hour, just by not having to transmit power over the lines. “And if you stop and think about it, some companies using power generated by coal are playing $37 to $42 a megawatt hour and are making money on this, so Ormet would be paying $10 less than that . . . It’s a really sweet deal for Wayzata because they would not have to put their electricity on the transmission lines.”
Recently, Byers, Cain, and USW Rapid Response Coordinator for Ohio Donnie Blatt all attended a meeting with representatives from Ohio Governor John Kasich’s office.
“They listened, “Cain said, “But still they stated (Kasich) cannot do anything about it.” Cain said the meeting was very unrushed though and that it seemed like the representatives listened. “We told them at the time that something needs to happen, and it needs to happen fast.”
Cain explained: “The longer the plant is down, the longer people go without work and the further through TAA training they go, the more they find jobs elsewhere. We have told Kasich’s people that it is important a solution happens fast, as we are losing a lot of good, qualified people.
“People are moving on, going elsewhere . . . In 2006 after the labor dispute, we needed to hire 400 people to operate that plant. Ormet had to hire 800 people, bring them in and train them to retain 400 jobs . . . It’s 50 percent. People can’t take the heat and can’t take the punishing work.”
However, in the meantime, Ormet workers are coming together as they always have. For instance, Byers and Cain both appeared to be overwhelmed with the help the workers received during the recent food and toy drive. “A tractor trailer came with over 9,000 pounds of produce alone,” Byers stated. Adding, “We worked with local grocery stores and United Way to get good pricing, and a lot of department stores stepped up with kids toys.”
“We would like to give a thank you out there, thanks to anyone who donated any gifts, money, or time to help out, Byers said.
“We are very humbled,” Cain added.