Talks Fall Through Between Alcoa And San Ciprián Labor Union

Talks Fall Through Between Alcoa And San Ciprián Labor Union

The formal talks between Alcoa Corporation and the union representing the San Ciprián aluminium smelter labor force over the fate of the plant ended last week lacking an agreement as to the unit’s continued operation.

The consultation process ended on September 28, which the parties are mandated by the government to hold prior to a dismissal of the plant’s labor force. Alcoa announced plans for a general dismissal in mid-August in order to clear the way for potentially selling the operations to GFG Alliance.

Alcoa had previously announced a reorganization of the labor contract at the site in late June. Alcoa’s plan at the time involved halting production at the smelter but continuing operations at the casthouse. Alcoa took the step due to continued financial losses at the plant.

The firm subsequently received an offer to purchase the rest of the plant’s interest from GFG Alliance for the smelter they partner to run.

The two sides began talks over the plant’s fate last month, with the Spanish government standing in for the plant’s labor force. GFG has requested a 90-day inventory, which Alcoa says is not possible at the site. Meanwhile, Alcoa has offered to sell its interest in the plant to GFG for token consideration and a guarantee to pay US$50 million in escrow while assuming another $50 million in separation costs, plus a five-year alumina supply contract at “reasonable” terms. However, GFG says it wants Alcoa to assume over three times the separation costs it’s offering.

Alcoa noted that the consultation period expired on September 27 and an agreement with the plant’s labor union called for a one-day meeting to settle details on unemployment plans for the dismissed workers. However, the firm said no plan was forthcoming from the meeting, leaving Alcoa 15 days to make a decision on its own.