NEW MADRID, Mo. — Noranda Aluminum announced they would lay off between 125 and 200 employees at its New Madrid smelting operation over the next six months in light of the recent decision by the Public Service Commission.
The PSC officially denied a request from Noranda for a new electric rate from Ameren UE, a reduction of their current rate by about 25 percent. Because aluminum smelters use large amounts of power, Noranda is Ameren’s largest customer in the state, and consumes about as much power in one day as the entire city of Springfield.
Noranda has been embroiled in a protracted fight with Ameren over their electric rate for some time. The company has told PSC commissioners and lawmakers that without a lower electric rate, they could potentially be forced out of the state. The New Madrid smelter is one of 9 in the country and has the second highest electric rate in the nation.
Noranda CEO Layle “Kip” Smith said the layoffs were “heartbreaking,” but that Noranda had already filed a request for a re-hearing of their rate case. Smith also expressed disappointment that a compromise agreement reached by Noranda and all other involved consumer groups was rejected by the PSC. Smith also said that Noranda was exploring moving its new rod mill facility, which was originally intended to be constructed in New Madrid, to another state.
“Thirty years ago, there were 32 aluminum smelters in the United States and today there are 9,” Smith said. “Like other U.S. smelters that have survived, we need the help and leadership of our state to secure an affordable and competitive power rate. Specifically, we need the support and leadership of our governor, Jay Nixon, on this issue. Working together with the other consumers in Missouri and with the leadership of Governor Nixon, we can ensure the economic future for 900 families through Noranda jobs in the bootheel.”
Sen. Gary Romine said the decision by the PSC was a poor one, and that Gov. Jay Nixon and other lawmakers needed to be aware of “the people in our state doing work already.”
“I think it’s easy to say we want to help Boeing come into this state, but let’s not forget about the people right here already,” Romine said. “This is about the economic prosperity of this entire region, and we need to be more open to making reasonable concessions to allow these businesses to stay open and profitable.”
Rep. Steve Hodges, a Democrat, said the issue wasn’t about corporate greed.
“This isn’t about Noranda making more money,” Hodges said. “This is about almost 1,000 employees and the economy of this area. If this plant closes down, there’s going to be small towns all over this region that shut down and shutter buildings.”
Sen. Doug Libla said the decision will hurt the economy in Southeast Missouri.
“Manufacturing has long been a key part of Missouri’s economy, but it is now in jeopardy,” Libla said. “Escalating electric rates have put good-paying jobs at risk in Southeast Missouri, for example, Noranda and the 900 people they employ. The retention of existing companies must be as important as attracting new ones. Governor Nixon and his administration should become engaged and ratchet up their effort to find a solution that meets the needs of this critical employer. Noranda has been a good, long-term blue chip company in our state and we should do what we can to see that it will be for generations to come.”
Collin Reischman was the Managing Editor for The Missouri Times, and a graduate of Webster University with a Bachelor of Arts in Journalism.
