Alcoa to reduce production at New York plant

    Alcoa Inc. said Tuesday it plans to cut production at a plant in New York, but that an arrangement with the New York Power Authority will help it avoid mass layoffs.Alcoa, the largest U.S. aluminum producer, has faced sharply lower demand and prices as the global economic slowdown hits key buyers of the lightweight metal in the construction, automotive and packaging industries. In January, the Pittsburgh-based company reported its first quarterly loss in six years.Alcoa said it had planned to curtail production temporarily at its two smelters in Massena, N.Y. — which make about 255,000 metric tons of aluminum annually — by about 120,000 metric tons per year starting in May.

     That would bring Alcoa's total production cuts to more than 850,000 metric tons per year, or about 20 percent of its annualized output.That action would have resulted in the elimination of about 1,100 jobs, but Alcoa said it has reached an agreement with the NYPA that will allow it to continue operating one of the smelters and retain more than 250 of the 420 workers at the second smelter.The agreement includes a two-year waiver of minimum charges related to power allocations at one of the smelters, the East Plant. It also temporarily lowers Alcoa's job commitment threshold to 90 percent, conforming with NYPA's job commitment requirements of other industrial companies, and allows Alcoa to make payments to an economic development fund as projects are approved instead of having to capitalize the funds in full upfront.

    "It is critical to the economy and the future of Northern New York that we step in and work with Alcoa to avoid losing this community-anchoring company and largest private sector employer in the region with hundreds of high-paying manufacturing jobs," said Richard M. Kessel, NYPA president and chief executive, in a statement.Shares of Alcoa rose 65 cents, or 9.7 percent, to close at $7.34 Tuesday.