By Jacqueline Palank
Union workers are urging Ohio's governor to save Ormet Corp.'s
(ORMTQ) aluminum smelter there, warning that hundreds of jobs are
at risk.
Unlike Ormet's Louisiana facility, which has funding to continue
operating until it closes a sale, the company's Ohio smelter shut
down and doesn't have a buyer waiting in the wings.
Now, the United Steelworkers Union is seeking signatures for a
petition to request that Ohio Gov. John Kasich get involved and
help restart operations at the at the Hannibal, Ohio, facility,
which employed more than 600 people. The smelter shut down on Oct.
4 after the state's utility regulator, the Public Utilities
Commission of Ohio, denied a plan to keep it up and running while
it transitioned to a natural gas power-generation facility.
The union wants Gov. Kasich, a Republican who served in the U.S.
Congress for 18 years, to bring PUCO and electricity supplier
American Electric Power Co. (AEP) back to the bargaining table to
negotiate a deal that will allow the Hannibal facility to resume
full operations.
"Our union, Ormet management and creditors worked together in
the bankruptcy proceedings to reduce the company's financial
liabilities by nearly $300 million," USW International President
Leo W. Gerard said Tuesday in a statement. "It's time for the
governor to make sure PUCO and AEP do their parts as well."
Not only are there more than 600 smelter jobs at stake, but the
union warned that the smelter's permanent closure could ripple
throughout the region, cutting other jobs and leading to lost tax
revenue, among other consequences.
"We encourage everyone to help send the governor the message
that Ohio simply cannot afford to allow AEP to drive Ormet into
liquidation," said union official David McCall. "The impact of
another catastrophic job loss will devastate these
communities."
Representatives of Ormet, the governor's office and AEP couldn't
immediately be reached for comment Tuesday morning.
PUCO spokesman Jason Gilham said Ormet hasn't filed any new
applications to reopen the plan or requested a rehearing, so
there's nothing the commission can do right now. "We can only
consider what's in front of us," he said.
Ormet filed for Chapter 11 bankruptcy protection in February
after struggling with falling aluminum prices and rising
electricity, labor and raw material costs. The company later won
court approval to sell itself to private equity firm Wayzata
Investment Partners LLC, but the deal fell apart after Ormet failed
to strike a deal with American Electric to lower its electricity
rates.
Ormet has said it may be able to reopen its Hannibal smelter if
aluminum prices improve and it obtained a long-term economical
power supply.
(Dow Jones Daily Bankruptcy Review covers news about distressed
companies and those under bankruptcy protection. Go to
http://dbr.dowjones.com)
Write to Jacqueline Palank at jacqueline.palank@wsj.com.
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