Steelworkers Urge Ohio Governor to Help Reopen Ormet Smelter

   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 [e-mail].

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