Ormet officially closed
HANNIBAL, Ohio – The remaining 20 employees at the Ormet aluminum plant were officially let go Thursday as the new owners of the plant – and representatives from the United Steelworkers Union – wait to determine the next step.
Niagara Worldwide’s ownership became official Thursday morning when the deal was finalized. The company purchased the plant and surrounding property last month at auction for $25.25 million.
With the closing of the sale came the final blow to those employed by the Ormet Corp., as the remaining 20 employees saw their employment terminated. They join more than 900 other people who have been let go from the facility in the past few years as the company searched for a buyer.
Last year, Wayzata Investment Partners expressed interest in paying $221 million to purchase the plant, provided Ormet could secure a reduced electricity rate from American Electric Power. Following a long dispute with the Public Utilities Commission of Ohio and AEP – in which Ormet asked the PUCO to lower Ormet’s AEP costs from $60 to $45.89 per megawatt-hour – the aluminum producer shut down the smelter in October when the PUCO did not grant as much rate relief as Ormet wanted. In February, Ormet officials announced intentions to sell the plant, roughly one year after the company filed for bankruptcy protection.
In June, Niagara President Eric J. Spirtas announced his company had purchased the plant and all associated property, with a U.S. Bankruptcy Court judge approving the sale a few weeks later. Niagara is based in Niagara, Wisc. and acquires, markets, manages and sells idle industrial properties and assets.
Spirtas said the firm acquires properties such as Ormet in hopes of enacting a business and feasibility plan for them.
Following the sale, Spirtas said he could not commit to re-starting operations at the plant. He said the company would explore all options, and remained positive the site’s location – as well as the strong local resources and workforce – would be an advantage in finding the right fit.
On Thursday, Spirtas said the company planned to make an announcement regarding the future of the site today, though he provided no additional information.
With the uncertainty – and acknowledging Spirtas had officially owned the property for less than 24 hours – USW representative John Saunders said he and the former workers were anxious to see what will happen.
“The ball is really in their court,” he said.
Saunders said regardless of what Niagara decides to do with the property, the union will continue looking for an operator willing to restart the idled facility. He said despite the unanswered questions, the situation is better now than it has been.
“The old power deal went away with the bankruptcy,” he said. “If we can find a person to operate it and get a new power deal, we can hopefully convince Niagara it is a good enough deal for them. The union’s intent is clearly to someday make aluminum there again.”
Saunders, though, was also quick to acknowledge it will not be an easy task to restart the facility.
“We haven’t given up hope, but we don’t want to mislead our members that this is going to start up anytime soon,” he said. “It’s an uphill battle.”
That battle isn’t unique to Ormet, Saunders said, and is indicative of a trend in the Ohio Valley. He said of the three bidders at the Ormet auction, none had any interest in operating the facility. He said the same scenario played out with the former RG Steel property in Mingo.
“We live in a country today where making things in America doesn’t have much value,” he said. “People don’t want to invest.”
Further complicating matters is the oil and gas boom, as Saunders said riverfront properties such as Ormet are attractive to companies in that industry. He said the ability to store equipment, pipe, sand and gravel and easily load them is important to those companies, and many are willing to pay large amounts for properties that offer easy access.
“It lessens the value of these properties, and makes it hard to get back to making whatever it was they were making before they were liquidated,” Saunders said.
Still, Saunders said he and other union representatives are ready and willing to meet with Spirtas and other company officials to figure out what it will take to restart Ormet as an aluminum producer.
“We’ll meet any time, any place,” he said. “We have limited ability to make anything happen without Niagara’s help and clear indication that operating that facility is a longterm goal.”