Alcoa Shutting Md. Plant

600 workers have gotten layoff notices.
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Alcoa (AA) - Get Report will close a Frederick, Md., aluminum plant next month because electricity is too expensive.

The Pittsburgh-based aluminum giant said curtailing aluminum production at its 61%-owned Eastalco smelter will result in a fourth-quarter pretax charge of $14 million. The company said 600 workers have gotten layoff notices.

"Unfortunately, we have not been able to secure a competitive power arrangement to date, so we will be forced to curtail the plant," said Alcoa's Geoffrey Cromer. "Many people -- our union, elected representatives, members of the community, and, first and foremost, our dedicated, loyal employees -- have worked to help us find a short-term legislative option that would allow us to pursue a longer-term solution to save the plant and these jobs. We appreciate every bit of effort that they have put into that challenge. Despite all that work, a legislative solution has not succeeded yet, and we have received no indication that, if we were to get a successful vote, it would be signed into law."

"We will continue to work with those in the community to pursue longer-term power options and take steps to ease the impact on our employees and the community as much as we can," said Cromer.

Eastalco has been operating under a power arrangement from Allegheny Power that will expire at year-end. The current rates paid by Eastalco are 40% higher than the global smelting average paid for electricity.

On Wednesday, Alcoa dropped a nickel to $26.65.