Brad Byrd In-Depth: Greg Wathen Talks Alcoa Adding Jobs

On Tuesday, Alcoa announced it is reopening some of its Warrick County smelter operations and bringing back 275 jobs. This comes a little more than a year ago when the company closed the smelter and cut 600 jobs.

Brad Byrd talks with Greg Wathen, who is the president and CEO of the Economic Development Coalition of Southwest Indiana, about Alcoa bringing back jobs and its short turnaround.

Transcription of Interview:

Brad Byrd: "Alcoa announced it is reopening some of its Warrick County smelter operations bringing back 275 jobs. This comes a little more than a year ago when the company closed the smelter, and with it, cutting 600 jobs. I'm joined tonight by Greg Wathen. He's the president and CEO of the Economic Development Coalition of Southwest Indiana. Greg, good to see you again as always. This is obviously very big news for these workers on a human level, who, if they want, can get their jobs back. A little more than 200 of those jobs. It has national implications too as far as the aluminum production picture of this entire country. Tell me about that."

Greg Wathen: "Primary aluminum production is strategically critical production in the United States. When you contrast it to China where you have over 100 smelters, right now, excluding Warrick County, there are five in the United States. With Warrick coming back on board, there will be six in the United States. So it's a very critical industry. For us, this is a very significant decision that Alcoa made."

Brad Byrd: "The thing that kind of jumped out at us in the newsroom yesterday when Alcoa made this announcement is that for those workers who lost their jobs, that's been a very long 14 months or 15 months. But this turnaround was relatively quick, and it's been attributed to the union being involved, Alcoa business being involved, and also attributing some of it to the climate economically in the country since the change of administrations. How does this happen so fast?"

Greg Wathen: "Well I think a lot of things. Think about what was happening at the time of the decision was made to shut down the shelter. You had Alcoa splitting into two publicly-traded companies. You had Alcoa the traditional company, which would be in terms of the upstream, mining, smelting. And then you have the downstream, the value added which will be the production side. So the decision was made by Alcoa, this is a fully-integrated production facility campus where you do power generation, you have primary aluminum production, smelting. And then you do have rolling mill. To take that on I think that sort of changed the business case for looking at how you deliver efficiently the product that they needed to deliver to their customers. That's when, I believe, the smelter came back into question."

Brad Byrd: "This question, with respect to those workers who lost their jobs, some of them able to get their jobs back if they so desire. This is not meant  in any way a matter of disrespect to them, whenever you hear the phrase, “coal fired power plants,” there are environmental concerns in the role that Vectren is playing in this. What do you say about that?"

Greg Wathen: "We certainly don't want to diminish any environmental concerns, but the reality is in this country, take a state like Indiana. World-wide, more than 85% of power generated through fossil fuels, predominantly coal, world-wide wind is slightly more than 3%, solar is slightly more than 1%. It's what you call dispatchable or non-dispatchable or base load or intermittent power. So from the standpoint of if you want to have an efficient operation generating your own power and you have the ability to do that, then you have to look at how you do that very thing. Think about several years ago,what Vectren did in working with Alcoa. They put a lot of pollution controls on these very plants. The power plants didn't shut down when the smelter shut down, in terms of they reduced the amount of electricity they were generating. But they were not shutting down, so I see this having less of an environmental impact than what some people may be portraying it."

Brad Byrd: "Do you see this as a sign that there could be an upsurge, maybe a renaissance of aluminum production in this country? This tends to go down the line, as you said, this was an internal business decision by Alcoa. Will Alcoa see it's glory days at that Warrick operation as it saw some 50 years ago?"

Greg Wathen: "I think we better be concerned about certain critical products manufactured in the United States and aluminum being one of those. It's an industry that's most assuredly important. Think about this, with Alcoa-Warrick coming on with the smelter, 50% of the primary aluminum production in the United States will be an hour within our location. That's in Hawesville, Sebree, and Warrick County. There will only be six smelters in all of the United States when China has 100 of them. These are critical cunnings of industry to support that. I think for whatever you might say about the Trump administration, there's been a reverse of how we've looked at these industries and investments are being made. I think this is good news in terms of Alcoa reevaluating their decision."

Brad Byrd: "As far as that perception of the United States and especially China in the manufacturing of aluminum and other products for that matter, do you feel that had more of a role in this, possibly? Or was this purely a decision within Alcoa? Because they're investing a lot of money now to get this smelter. They're investing millions of dollars to get this. They could have done this 14 months ago."

Greg Wathen: "Sure. That's a good question and only one that Alcoa can answer. I think from our perspective, when Alcoa decided as a company that they were going to be in charge of the entire campus instead of having a split campus, we had a fully integrated mill. I think the business case was such that they wanted to reevaluate if they should bring the smelter back on board. So that probably played a lot more. That being said, there's been a resurgence on behalf of the US administration of looking at strategically critical industries, aluminum being one of those."

Brad Byrd: "They hope to have the operation back up in 2018."

Greg Wathen: "The second quarter of 2018, so that's a pretty fast turnaround as well."

Brad Byrd: "Alright. Greg Wathen from the Economic Development Coalition of Southwest Indiana, thank you for joining us."

Greg Wathen: "Thank you for inviting me."

(This story was originally published July 12, 2017)On Tuesday, Alcoa announced it is reopening some of its Warrick County smelter operations and bringing back 275 jobs. This comes a little more than a year ago when the company closed the smelter and cut 600 jobs.

Brad Byrd talks with Greg Wathen, who is the president and CEO of the Economic Development Coalition of Southwest Indiana, about Alcoa bringing back jobs and its short turnaround.

Transcription of Interview:


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