Alcoa To Lay Off 300 Workers At Texas Facility

August 22, 2008 7:25 p.m. EST

Pittsburgh, PA (AHN) - Alcoa Inc. announced Friday it will need to lay off roughly 300 employees at the company's Rockdale, TX facility. The company said several idle periods at the facility due to power outages were the reason for cuts.

The facility, which is an aluminum smelter, was partially shutdown in June due to ongoing power outages linked to an onsite power generating unit manufactured by Luminant.

The aluminum producer said the power issues have caused them to suffer from uneconomical power costs. During times of power loss, Alcoa had to pay-up to get local energy, spending from $2,000 to $4,000 per megawatt hour, 100 times normal pricing levels, according to Alcoa.

Alcoa was not able to resolve the issue with Luminant to their satisfaction and is suing them for damages.

"Unfortunately, the power plant that Luminant operates has not been reliable over the past year," said John Thuestad, president of Alcoa's U.S. Primary Products Division, according to the Associated Press.

The layoffs begin on Aug. 31 when 100 employees will be let go. The cuts will conclude by the end of the year.