Axe hangs over 600 jobs

MORE than 600 jobs are hanging in the balance as Lynemouth’s Alcan plant faces sale or closure.

Parent company Rio Tinto announced this week that it was looking to off-load 13 of its assets to streamline its business after a strategic review.

And Lynemouth’s power station and smelter, which is Northumberland’s biggest private sector employer, is one of them.

The company admitted that if a buyer cannot be found, closure is an option.

Bosses are hopeful that the power station, which employs 120 people, will be sold as talks are progressing well with a potential buyer.

But no offer has been made for the smelter, which provides 510 jobs.

Director John McCabe said: “Rio Tinto doesn’t want to retain the Lynemouth business in the future so it is looking to sell potentially, or close the operations.

“We are hopeful of achieving a sale for the power station and we are already in talks with a potential buyer and we think the buyer is satisfied with the progress that is being made, but the smelter is more difficult and as of today there has been no offer on the table for that.

“Obviously there is a great deal of concern right now among our workers. People are concerned about their future and what this all means. It is a worrying time.”

The business has faced rising costs since new environment legislation came into force last year, which requires it to buy allowances for its sulphur and nitrogen oxide emissions.

There would be an even greater financial burden in 2013 from the introduction of European and UK carbon emission levies.

However, Wansbeck MP Ian Lavery is furious that Rio Tinto has announced its plans while the Government is still considering how it can support energy intensive businesses and a package could be announced next month.

He said: “I’m disappointed that Alcan at this stage has come out with the announcement because the Government is still coming forward with proposals to assist energy-intensive industries like Alcan.

“Rio Tinto should have waited to see what support the Government is going to come up with. It didn’t need to make an announcement at this time, leaving the 650 workforce hanging on a thread in the run-up to Christmas and New Year.

“There should have been more dialogue locally and perhaps we could have come up with some sort of solution.”

Mr Lavery also questioned the sale of the business when he said it is making profit.

“When you hear of local businesses closing down it is because they are not making a profit, but this operation is making in excess of £50million profit,” he said.

“What the company is saying is it wants rid of aluminium processing plants mainly because they are not making enough profit. The one thing Alcan has in its favour is it is a profit-making operation.

“It has a highly-skilled and highly-trained workforce, all of the best equipment and makes huge profits.”

He added: “I am saying to everyone that the campaign started on Monday and we will make sure we do everything and leave no stone unturned to explore all possibilities to ensure that everyone who is employed at Alcan will still be employed at Alcan for years to come.”

Mr McCabe said no decision has been made on the Lynemouth plant’s future and the company will listen to Government proposals, but he disputed Mr Lavery’s figures, saying the operation is currently just breaking even.

“If the Government does come forward with something that is sustainable and does it soon enough then of course we will look at that. No final decision has been made, but we can’t wait forever for the Government to do something,” he said.

“We have been talking to the Government for months and years about some of these issues, but it hasn’t come out with anything that would have a significant bearing on the problems we have.

“There is environmental legislation which costs this business a lot of money and will cost a lot more from 2013, more than £70million a year. If the Government thinks it can support us with that we will be interested to hear from it.

“Last year we made just under £40million profit, but since then the price of our product and aluminium has fallen dramatically. It is a price that we don’t have any control over.

“Our profit has been wiped out just by the change in market conditions. We are just over breaking even and that is before the cost of the new legislation.”

No time-scale has been set to try to find a sale and Rio Tinto says it may wait until the economic climate improves.

Meetings have taken place with workers to explain the situation.

l Union reaction, see Page 2