Kaiser Aluminum Corp., announcing a $54.5 million modernization at its Mead smelter Monday, said the project will save the company $8 million annually in energy, labor and operating costs.
Dave Kjos, vice president and works manager at Mead, told a press conference that replacement and reconstruction of furnaces in the carbon-bake department will employ 73 outside construction workers for nearly three years and pump $33 million directly into the Spokane economy.
But once completed, employment within the department will be reduced through attrition or transfers from 80 to 45 people, reflecting greater automation and efficiency of the new furnaces.
Union leaders, however, were not upset. They said the decision meant Kaiser had committed itself to Mead.
“When I see them making this commitment, I’m less concerned about my long-term future,” said Larry Strom, a potline worker and member of a transition team that is reorganizing United Steelworkers of America Local 329.
The Mead smelter currently has four furnaces covering four acres. They produce 2,000 carbon blocks, or anodes, daily. The anodes conduct electricity through large pots where an electro-chemical process produces molten aluminum.
Kjos said Kaiser had considered moving its carbon bake to South America, Europe or another site outside Washington state. While the company desperately needed to replace its World War II-vintage furnaces, it was attracted to lower tax rates in other states and cheaper power in other countries.
Washington legislators, however, last year exempted capital improvements from sales taxes, which will save Kaiser $4.3 million on the furnace improvements. Kaiser also struck agreements with the Bonneville Power Administration and Washington Water Power Co. to provide power to the aluminum company into the next century.
“This is a big deal for us,” Kjos said. “This is a major step in securing Mead’s long-term future.”
Strom, the potline operator, said the union has complained for years about poor quality carbon produced by furnaces that were erected in 1942. New furnaces will increase the life of the anodes, he said, reducing labor and maintenance time.
“What it all means is we’ll make better aluminum,” he said.