Alcoa, Inc., plant manager calls for TVA to reduce power costs

If Alcoa, Inc., could get a long-term power contract, the smelter in Blount County could begin making aluminum again and bring back jobs lost when the economy tanked, one Alcoa, Inc., official told county officials on Monday.

David Hensley, interim plant manager for Tennessee Operations, spoke during the community meeting held at company offices off North Wright Road Monday evening, April 4. Hensley is in charge of the smelter and shared his thoughts with a group of elected officials on hand for the meeting and tour.

“I want to talk about business, or the lack thereof,” Hensley said. “The smelter is not operational and for the first time in 90 years, it is not at production capacity.”

In June of 2006, approximately $100 million investment in upgrades was made to the plant, but by June of 2008, the price of aluminum began plummeting. In November of 2008, 110 people were laid off, he said.

“All the investments we made drove our costs up. In January of 2009, we shut down one pot line. We were blowing off $20 million a month. We were in dire straits. In the middle of March 2009, we curtailed our other pot line and laid off 450 people,” he said.

Hensley said it will take a new power contract with the Tennessee Valley Authority for conditions to become favorable for the company to restart the pot lines. He said that Alcoa has restarted lines in Washington State and New York state because those plants got better contracts than Tennessee Operations.

“We’re $20 per mega watt apart right now from where we need to be,” he said of negotiations with TVA. “We need to get there. We only have seven out of 450 employees left, and the only thing they can do is keep the grass mowed and keep the equipment cycled.”

Hensley said Alcoa, Inc., wants TVA to give them special consideration in how they negotiate because Alcoa, Inc., sells TVA all the power it generates from four dams on the Little Tennessee River, and this is an advantage other companies don’t have. “They want one industrial contract for the whole valley,” he said. “We want to be looked at differently.”

The elected officials on hand included Register of Deeds Phyllis Crisp, Blount County commissioners Gordon Wright Sr., Jerome Moon, Rick Carver, Tab Burkhalter, Gerald Kirby, Mark Hasty and Commission Chairman Kenneth Melton.

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