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Alcoa production cut in Quebec shows 'lack of respect' for lockout negotiations

Citing lack of personnel amid a nearly yearlong lockout, Alcoa Corp. said it would cut about half the capacity of the last operating potline at its 74.95%-owned Becancour smelter in Quebec.

The smelter, 25.05% owned by Rio Tinto Alcan Inc., has been operating at lower capacity since Alcoa locked out unionized workers Jan. 11. Alcoa had already curtailed two of three potlines at the Becancour smelter and is now cutting half the capacity of the third potline, which has a nameplate capacity of 138,000 tonnes per year.

The move comes amid protracted negotiations with 1,030 unionized workers that have drawn in the Quebec government, which has warned it could intervene if the two sides do not reach an agreement. The government recently extended a Nov. 30 deadline for a negotiated agreement to Dec. 21.

Clairandree Cauchy, a spokesperson for the Syndicat des Metallos/United Steelworkers in Quebec, called Alcoa's decision to suspend capacity just days before the deadline "a slap in the face" to the government and a signal that Alcoa is not committed to negotiations.

"It's a lack of respect regarding the process," Cauchy said. "We're in a bargaining sprint and closing half of the remaining capacity shows that the company doesn't put a lot of energy and goodwill into this."

The sticking points in negotiations are over seniority rules and pension plan structure. But Cauchy said current proposals were worse than what unionized workers rejected in January.

Alcoa and the Quebec government could not be reached for comment as of press time. In a Dec. 19 press release, Alcoa said it was committed to a negotiated agreement.

For the Quebec government, the lockout and lower output have cut into electricity-related revenues from Becancour, Cauchy said. Alcoa has an agreement covering electricity costs in which it would typically buy a set amount of power. During circumstances such as a lockout, the rule does not apply, Cauchy said, allowing pay for use instead.

Cauchy estimated Quebec had lost nearly C$200 million in revenue since the lockout began on the back of lower power payments.

Nonunionized management workers have been operating the Becancour smelter during the lockout. Alcoa said it needed to make the additional cuts for safety and maintenance reasons with fewer workers on-site after retirements and departures.

"The salaried employees who remain will continue to ensure that the smelter can be ready for a potential restart," it said in the release.