Ormet, still pursuing break, to lay off 200

Staff Writer
Columbus CEO

Ormet Corp. has announced plans to lay off about 200 workers at its Hannibal, Ohio, plant, and the company has given notice that it might lay off the remaining 700 if it is unable to negotiate an increase in an electricity subsidy.

This is in response to the Public Utilities Commission of Ohio’s vote last week to schedule a triallike hearing about the subsidy, as opposed to granting Ormet’s request for emergency approval of a subsidy increase.

“We’re working with all of the affected parties to arrange to find the best way we can to operate until the results of the hearing are known,” said James Riley, Ormet’s chief financial officer.

Ormet, an aluminum smelter that is in bankruptcy, has said that the new electricity plan is necessary to allow the company to be sold to a Minnesota investment firm. The company is one of the largest employers in its part of southeastern Ohio.

With the new layoff, the plant is idling two of its lines. This, plus a previous decision to idle two other lines, means only two of six lines are active. At full employment, Ormet has about 1,100 employees.

The company gave notice to the Ohio Department of Job and Family Services that it might shut down the plant within 60 days. It lists 901 jobs that would be lost, comprising 744 hourly workers and 157 salaried.

“Such curtailment is expected to be indefinite,” the company said in a letter to the agency that was made public yesterday.

Ormet has said for the past year that rising rates from American Electric Power, combined with low aluminum prices, might lead to a permanent shutdown.

The company already receives the largest electricity subsidy in the state, which would lead to total benefits of more than $300 million by 2018. AEP customers pay for the discount through their electricity bills, with a typical central Ohio household paying about $3 per month.

Ormet is asking for a modification of the discount that would allow the benefits to be paid sooner and make several other changes.

Consumer advocates and several other groups have urged the PUCO to reject the request, which they say is an unfair burden on all customers that provides benefits to only one customer.

AEP is also part of the debate. It wants Ormet to stay in business but has concerns about the company’s proposal.

While the PUCO decided not to issue an emergency approval for Ormet, it has not commented on the merits of the plan. The hearing is scheduled to begin on Aug. 27.

“The commission recognizes the critical nature of a timely decision,” Todd Snitchler, PUCO chairman, said before the vote last week.



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