(Photo courtesy of Noranda Aluminum)
NEW MADRID -- In an effort that would "significantly reduce operating costs, improve operating efficiencies and conserve liquidity," Noranda Aluminum Holding Corporation announced on Thursday a company-wide workforce and business process restructuring. It will include more layoffs.
The move involves a total staff reduction of approximately 338 employees and contract workers, including 228 affected employees at the New Madrid facility, according to a news release.
Keith Gregston, president and general manager there, said the 228 includes the 124 layoffs that took effect Nov. 1 and Wednesday, in addition to salaried employee reductions that occurred Thursday.
Other workforce reductions are expected to occur in the first quarter of 2009, which will bring the total number to 228.
The other 96 positions set to be eliminated will occur in Noranda's downstream facilities in Huntington, Tenn., Salisbury, N.C. and Newport, Ark.
The move is expected to generate cash cost savings and operating efficiencies of about $23 million.
"Of course we hate it," said Christina McWaters, executive director of the New Madrid Chamber of Commerce, of the layoffs. "But we do encourage people to continue to support the local businesses that are in town."
McWaters said she and others are doing their best to stay positive and hopeful that, when the economy rebounds, the jobs will come back, too. One downfall, she said, is that some families may have to move to other areas in order to find work.
Jessica Sanders, secretary of the United Steelworkers Union Local 7686 in Marston, said several laid off workers are calling with concerns.
"A lot of them are worried about insurance," she said. "It's a hard time and a horrible situation."
The office has resources to help out. "Anything that we can do, we're willing to do," she said. She also has information about job openings in the area, applications for food stamps, MC+ and other benefits, in addition to short-term insurance information.
More information will also be presented at the next union meeting, with sessions set for 3:30 and 7:30 p.m. Thursday, she said.
"We are sensitive to the impact this will have on affected employees, their families and the communities in which they live and work. As hard as these decisions were to make, it is critical that we react to the current economic environment and control our costs, improve our productivity and continue to provide quality products at a competitive value," Layle K. "Kip" Smith, chief executive officer and president of Noranda Aluminum Holding Corporation, wrote in a letter. "We remain committed to our customers, communities, co-workers and investors, striving to build sustainable relationships that will ensure for years to come. We must, therefore, achieve success in the short-term to build towards our long-term future."
According to the news release, it is estimated that the actions will result in one-time pre-tax charges to be recorded in the fourth quarter of this year of approximately $7 to $12 million, primarily due to one-time termination benefits.
Layoffs are typically done according to seniority. According to Sanders, some hourly workers laid off were hired as far back as 2005.
Noranda Aluminum Holding Corporation is a leading North American integrated producer of value-added primary aluminum products, as well as high-quality rolled aluminum coils. The New Madrid plan is one of its upstream facilities, which produce primary aluminum.
According to its Web site, prior to the layoffs, the New Madrid operations directly employed 1,100 people with an annual payroll of approximately $60 million.