DaCosta, left, and Lyew-Ayee
Balford Henry, News Editor
JAMALCO SAID yesterday that it is still unable to determine the impact of the decision by parent company, Alcoa Inc., to accelerate cost reduction initiatives and cut some 8,000 jobs worldwide.
Alcoa said in a release on Wednesday that it planned to restructure its operations, globally, including those experiencing negligible growth particularly in Europe and South America, and that this would affect approximately 8,000 employees at over 70 of its operations, worldwide.
The specific operations to be affected were not named, but there are fears that Alcoa's local investment in Jamalco may suffer from the changes in terms of jobs, as well as the proposed US$115 million expansion at Jamalco, Clarendon.
"We are unable to determine the impact this will have on Jamalco's operations, as we are still awaiting information from our Corporate Office," a statement from the office of Jamalco's general manager, Jerome Maxwell, yesterday stated. Jamalco said that it would be in a better position to give details on Alcoa's proposals in the next few weeks.
Minister of Information, Senator Burchell Whiteman, said yesterday that he did not expect any problems in the short term, but that he could not speak to the long term effect as he had not been informed.
NWU vice-president, Norman DaCosta, suggested in a statement on Thursday that the decision was likely to Jamalco, "as the company will be under increased pressure to become more cost effective."
He said that although most of the job cuts would be in Europe and South America, Jamaica would not be immune from such adverse developments, "which is part of the global industry's process of rationalisation."
"We are particularly vulnerable, because none of the local alumina refineries are currently within the top 50 per cent of the world producers," he said.
But, Jamaica Bauxite Institute's (JBI) general manager, Parris Lyew-Ayee, said that, to the best of his knowledge, Alcoa had not changed its mind about the US$115 million expansion it had proposed in collaboration with the Jamaican government, its partner in Jamalco.
Last April, Prime Minister P.J. Patterson announced that his administration and Alcoa would jointly invest US$115 million in the Jamalco alumina refinery, under an agreement which also ended the 28-year-old bauxite levy. The agreement is for the Jamalco plant to be expanded by 250,000 tonnes, pushing its capacity from the current one million to 1.25 million tonnes.
Jamalco is a 50/50 partnership between Alcoa Inc. and the Government of Jamaica with Alcoa as the managing partner.
Alcoa was the first company with which the Government entered into negotiations to hammer an arrangement to end the controversial bauxite production levy. The levy was imposed by the Michael Manley administration in 1974, when bauxite production peaked at 15 million tonnes. Production dipped sharply after that and has only rebounded recently.
Alcoa Inc. of the US is the world's leading producer of primary aluminium and alumina and is active in all major aspects of the industry. However, sales for the fourth quarter were $5.06 billion compared to $5.10 billion in the same quarter of 2001. Sales for 2002 were US$20.26 billion, compared to US$22.50 billion for 2001.
It announced that certain businesses will be divested and the proceeds used primarily to reduce debt and increase flexibility for future growth opportunities in its core businesses.
Full details of the proposals are likely to be revealed when Alcoa has its next quarterly analyst meeting on January 23.
