Alcoa has announced it is conducting a review of the viability of its Point Henry aluminium smelter in Geelong, placing increasing uncertainty on the future of the plant’s 600 staff. The company has yet to rule out extensive job cuts in its Victorian operations.

 

Alcoa blames a high Australian dollar and low international metal prices on the impact on the company’s profitability, while announcing that the downturn would have occurred regardless of the Federal Government’s carbon tax.

 

''We continue to work with our workforce about what we can do to further improve productivity. We can continue to work with raw-material suppliers and look for alternatives in raw-material suppliers. But one of the factors we don't control is the currency. Manufacturing in Australia at $US1.08 is becoming a problematic consideration for not only aluminium industries but for other industries as well,” Alcoa Australia Managing Director Alan Cransberg said.

 

Premier Ted Baillieu announced has warned that the announcement would cause uncertainty for the company’s employees while also putting pressure on the local community.

 

“As Premier, I have asked the Ministers for Manufacturing, Energy and Regional Cities to engage closely with the company and the local community while Alcoa undertakes its review,” Mr Baillieu said in a statement.

 

Mr Baillieu took the opportunity to criticise the Federal Government’s carbon tax, saying that the company has indicated that the legislation will generate increased cost pressures. However, Mr Cransberg told reporters that the review would have occurred regardless of the tax.

 

The Australian Workers Union has accused Alcoa of negligence in its lack of investment spending in the 50 year old plant.

 

"It should have been upgraded during the many, many good years. The company's lack of investment in Point Henry amounts to exploitation of the people of Victoria, and of Geelong in particular,” AWU Victorian Secretary Cesar Melhem said.

 

"To turn around now and consider cut-backs, or worse, is outrageous, particularly in the light of the assistance given the company over the years in terms of energy concessions."

 

With overseas sales of over $1.6 billion, the company is Victoria’s single largest exporter.