Rescue for Alcoa smelter but jobs will go

29 Jun 2012, 5:37 pm   -   Source: AAP

A $40 million government package will keep Alcoa's Victorian smelter open for at least two years, but some 60 jobs will go as it streamlines operations.

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Alcoa's aluminium smelter in Victoria will stay open for at least two years thanks to a federal-state government rescue package, but the company says it will have to scrap dozens of jobs.

Alcoa will receive $40 million in commonwealth funding and an unspecified amount from the state to make its struggling Point Henry site - which employs about 600 people - more efficient.

Alcoa Australia chairman Alan Cransberg announced the news on Friday after a three-month review of the Victorian operation, saying he was optimistic about the smelter's future.

But he said about 60 jobs would be cut and the company would seek voluntary redundancies as it made changes to its production, supply chain and management.

"There are some tough times ahead; we still have some difficult things we need to do, but we're very confident of running this plant at least until 2014, and over that period making sure that we can create a future for it beyond 2014," he told reporters.

Federal Innovation Minister Greg Combet said the rescue package required Alcoa to invest in better productivity, keep the smelter open until at least July 2014 and maintain production levels.

"We want to work together to ensure that this smelter achieves ongoing viability, because it will ensure the future of almost 600 direct jobs and hundreds if not thousands of others in the region," he said.

Victorian Premier Ted Baillieu said his government had made a "modest contribution" to the package, and also pledged an additional $4 million to an industry fund for local contractors and suppliers working with Alcoa.

Australian Workers Union Victorian secretary Cesar Melham, who met with Alcoa bosses in the United States earlier this year to help save the plant, said the announcement was a vote of confidence in Point Henry workers.

"I can't help but think we could have had very different news today if we hadn't made that journey, and if our members had not contributed so intelligently to a solution," he said.

Bill Guinane, a maintenance manager who's worked at the plant for 10 years, said the announcement would ease many workers' worries.

"People have been anxious," he said.

"Now there's an opportunity to move forward and set the place up for the future."

Federal Opposition Leader Tony Abbott said he did not oppose the bailout but questioned its motivation and timing, calling it "carbon tax compensation" for Alcoa.

"If you don't have the carbon tax you don't need the compensation," he said.

Mr Combet said Alcoa's problems were the high Australian dollar and plummeting metal prices, not the impending carbon price.

NSW Energy Minister Chris Hartcher said the federal government had ignored hundreds of smelter employees facing redundancy when Norsk Hydro announced it would close its plant in the Hunter Valley.

Mr Hartcher said Friday's announcement "screams of pure politics" as the Point Henry smelter was located in the marginal federal Labor seat of Corio.

But AWU national secretary Paul Howes said the criticism was unfair as Norsk Hydro hadn't asked the government for help.

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