Alcoa’s announcement that it is shutting down our state’s last two aluminum smelters may be a long awaited requiem for some, but there are other factors we should consider before burying it.
First, the Seattle Times reports the decision will cost 1,500 family-wage jobs with good benefits. And even though the trend has not been good for our aluminum industry, we need to look for opportunities to resurrect it.
In 2000, Seattle economist Dick Conway found the five largest smelters in Washington employed more than 7,500 people and generated $2.6 billion in revenue. The average salary for aluminum workers at the time was $49,330, which was 1.7 times our state’s average.
Second, the loss of smelting capacity in America should alarm us. Since 2007, Alcoa has cut its domestic production by 45 percent. As a result, we are becoming more dependent on other nations for the materials we need to defend our nation, restore our manufacturing sector and grow our economy.
There are several reasons given for Alcoa’s decision.
Among them, cheaper foreign competition, the worldwide economic slowdown, especially in China, and the glut of metals on world markets causing metal prices to plummet.Then toss in rising energy costs and union contract disputes.
The bottom line? Once an economic powerhouse in the nation’s top aluminum producing regions, Washington’s aluminum producers may be on a trajectory toward extinction.
Now we will have to rely more on China, Russia and other nations for our strategic metals, and given the strategic challenges posed by some of those nations today, that is a dangerous trend.
The only silver lining is there are no immediate plans to raze those two smelters. They have closed before and then restarted, the last time in 2011. However, others have been demolished over last two decades in Mead, Vancouver, Goldendale, Tacoma and Longview.
Mining and smelting are not pretty and in the past have polluted our air and water with heavy metals, arsenic and sulfur gases. Many of the old smelter sites, especially those which processed copper, silver and other metals mined in Montana, northern Idaho and Washington are Superfund clean-up sites.
Some of those large copper and silver smelters were built before 1900. Until the early 1970s, they dealt with air pollution by raising the stacks on their smelters to disperse the contaminants and installed settling ponds for waste water.
When much-needed new pollution laws were enacted, many of the old smelters were inefficient and their environmental controls were insufficient. But as costs climbed, our smelters could not compete on the world market with those from places like Norilsk, Russia’s most polluted city.
However, aluminum processing is different. While it has had its environmental challenges, companies have invested to comply with our high environmental standards.
In our region, the aluminum industry started with the completion of Grand Coulee and Bonneville dams, which produce greenhouse gas-free electricity. That excess “cheap electricity” generated from the Columbia River hydro system was just what the industry needed to turn imported bauxite into aluminum ingots.
When Boeing started using aluminum for World War II bombers, the aluminum industry grew and flourished. Because of its light weight and strength, Boeing still uses it in the commercial airplanes assembled in Renton and Everett. Even high-end new electric cars like Tesla are cast in aluminum.
The point is aluminum production is important to our state. While our state’s aluminum industry has faded, aluminum is still in high demand. The only questions are where will it be smelted and where will those manufacturing jobs be located?
Don C. Brunell is a business analyst, writer and columnist. He retired as president of the Association of Washington Business, the state’s oldest and largest business organization, and now lives in Vancouver. He can be contacted at theBrunells@msn.com
