Burnside alumina plant shuttered, hundreds laid off; future in limbo | Business

Burnside alumina plant shuttered, hundreds laid off; future in limbo | Business

For 15 years, Maurepas resident Troy Leader commuted from his Livingston Parish community to a Burnside specialty alumina manufacturing plant in Ascension Parish — until just over a month ago when the millwright was laid off.

He’s among hundreds of LAlumina workers scouting for new jobs after the plant closed its doors in August, with their union claiming members are owed money from the now-defunct business that owners say they are trying to sell.

The layoff came after the company warned the state in March that it was planning an indefinite layoff in May because of slumping market conditions and the coronavirus pandemic. Then it received a multimillion-dollar federal Paycheck Protection Program loan to keep the plant open even longer.

Out of 300 workers laid off last month, more than half have connected with the Louisiana Workforce Commission to try to find work. More than 200 of the laid-off workers were hourly employees in skilled trades jobs that require vocational training. 

At least 30 have found work at Noranda Alumina in trades and some management roles, according to the St. James Parish manufacturer.

“I rebuild gearboxes and pumps … install and align belts, anything that rotates,” said Leader, a 52-year-old Louisiana native who is still looking for work and has skills in maintenance installing, dismantling and reassembling machinery. 

It’s a critical job for a manufacturing operation like LAlumina that had run 24 hours a day extracting alumina from rock bauxite for use in making aluminum products.

When Leader began at the plant, it was under the ownership of then-Ohio-based Ormet. He earned about $22 an hour. In the past year, he earned $34 an hour for the same job at the Burnside plant that LAlumina LLC had acquired in mid-2019 from Almatis, which remained a primary customer for the plant’s products after the sale. 

It’s typically a comfortable life to support his family, a wife and daughter. His wife is an office manager at a pediatrician’s office, so the couple earned two incomes until his layoff.

The United Steelworkers Union claims workers are owed several months of health care benefits in addition to supplemental unemployment that was baked into their labor contract and is based on seniority. While the exact total owed is unknown, it could be in the millions. In late September, the union filed a formal complaint with the federal oversight agency the National Labor Relations Board about the company’s actions which is expected to follow a legal process to determine if the business violated any labor laws.

Leader said he expected about a year of health insurance in addition to a year of supplemental unemployment, which is 60% of his usual hourly pay for six months and 40% of salary for six months thereafter, as a union contract protection in the case the plant ever idled operations.

“If they would have honored it, (the agreement) would have been enough to survive,” Leader said. “It was a peace of mind that after I had worked for 10 years, I thought that I was going to have that protection that they just kind of threw out the window on us by not honoring it. We’re not just going to give up on it,” he said.

“We’ve filed grievances, and we’re trying to push them up” through the National Labor Relations Board, he said. “The company is just saying that they don’t have to pay all of these benefits that the contract has because it’s a permanent shutdown and it’s over, but we’re fighting it,” said David Delaneuville, representative of the United Steelworkers of America Local 14465. “We feel that we’re still under the contract (that just expired Sept. 30), but the company is not acknowledging that. I kind of believe that nothing is going to be resolved. We may end up in court.”

“There’s a lot of guys who have got more than 10 years over there and (the supplemental unemployment benefit) is a nice amount of money that would be added to their unemployment so they can survive until they find something,” Delaneuville said.

“Every time Amaltis closed down, they paid the sub (supplemental unemployment) and the plant came back up,” he said of the previous owner.

LAlumina is a company affiliated with Arthur Metals, an independent startup business co-founded by former British multinational mineral trading business Glencore alumina traders Matt Lucke and Zach Mayer. Arthur Metals acquired the Burnside Alumina site for an undisclosed price in July 2019 from Almatis.

Mayer declined to comment in a Sept. 16 interview about the union’s claims. He also declined to discuss the company’s progress with finding a buyer, saying it was too early.

LAlumina notified the state in March about plans to layoff workers indefinitely in May, leaving the plant with only a skeleton crew to maintain and monitor waste ponds at the plant site. The company already had sought to cancel state economic development incentive agreements in December, since it would not be eligible for a state subsidy reimbursement program this year that previous owners had tapped. It still has an active Quality Jobs program incentive but would not be eligible for more public money because of the layoff.

From 2011 to 2018, previous owners of the Burnside plant received $8.5 million in credits or rebates from the state as economic incentives for 341 jobs created, which accounted for $144.4 million in annual gross payroll, according to the state’s Development of Economic Development. The plant was owned by Ormet until it was sold in 2013 to Almatis then in 2019 to LAlumina.

LAlumina applied for and spent federal paycheck protection money — between $5 million and $10 million — this year to keep the plant open past May, federal records for the program show.

The demand for its product, used as a material for fire-retardant products like carpets or electric cabling inside of new vehicles, evaporated during the pandemic-inflicted economic recession.

“I guess they thought they could make a go of it and it didn’t pan out the way they thought, I’m not sure,” Leader said of LAlumina’s owners. “That’s the worst part about it that they came in and it was so short of a term. That’s a whole lot of investment for a short-term run time. COVID is COVID; they couldn’t have done nothing about that, but I don’t think that was the only thing. That was just the last thing.”

This isn’t the first time the plant has shut down. When the Burnside manufacturing operation was owned by Ormet Corp., it would shut down intermittently because of volatile market conditions then reopen when markets improved. But the parent company was large enough to cover worker pay during the slow times or renovate the plant for different uses to keep the lights on. In 2006, it was idled around Christmas by Ormet and wasn’t reopened until 2011. 

During that shutdown, some of Leader’s fellow workers retired, while others found careers elsewhere.

Leader didn’t want to leave his home in Maurepas then, and he doesn’t want to leave now.

“I don’t want to go anywhere; I want to stay right here. This is where I built my life, and this is where I’m gonna stay. I don’t have a mortgage. I’m paying my bills and my wife is still working, but I’m still looking” for a job doing maintenance work as a millwright, he said. “I sent some résumés out, so hopefully before the end of the year, I’ll be back working.”

Laurence Goodman, a labor law attorney at Willig Williams Davidson in New Jersey who is not involved in the steelworker’s complaint but represents unions, said that the outcome depends on the details of the LAlumina workers’ contract. 

“It always comes back to the language in the contract. There is an obligation under the federal WARN Act for effects bargaining such as meeting with the union about how people are going to get paid what they are owed,” Goodman said.

“The big issue here is whether in the end is there anybody who can pay. This is a problem that we see when somebody shuts the doors, and if there’s no assets, there’s no assets, and it’s not uncommon,” Goodman said. “They are in a bad situation.”

In Louisiana, more specific labor laws can govern contracts between workers and businesses. One is a wage payment statute, for example, requiring employers to pay employees within 15 days any amounts due when they leave the employer — whether the employee is terminated or has resigned. A collective bargaining agreement would typically supersede this state law. 

“If (the workers) have money they have earned when they separate from employment, they can make a (state) claim for any amount already earned (and not yet paid). The complicating factor here is the collective bargaining agreement,” said William Corbett, an LSU law professor who has been in the profession for more than three decades.

A best-case scenario for the workers could be for the LAlumina plant to be sold, according to the union. The ownership has previously indicated buyers had approached the business. If there was a sale, the union could negotiate with the new ownership about restarting the plant.

Meanwhile, Noranda Alumina, the company that has hired 30 former LAlumina workers, is weathering the storm as part of a larger company and is committed under an incentive agreement with the state to build its workforce to 400. 

In exchange for its commitment, Noranda Alumina received a $1 million forgivable loan in June 2019 through the Louisiana Economic Development Corp. for renovations of the alumina refinery in St. James Parish that it bought out of bankruptcy several years ago.

Noranda Alumina’s parent company is New Day Aluminum. It operates NICHE Industrial Chemicals, which is New Day’s global specialty alumina business that includes its Louisiana operations and also plants in France and the United Kingdom.

New Day Aluminum Executive Vice President John Habisreitinger said in early April that it was weathering the down cycle in the aluminum industry and global implications of the coronavirus and wasn’t anticipating any layoffs in Louisiana, selling products to the medical, military, energy, transportation, water purification and oil and gas industry.

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