JEFFERSON CITY - Two weeks ago I wrote about my disappointment with the Missouri Public Service Commission (PSC) and their decision to deny Noranda a rate reduction that would have helped them remain competitive in today’s economy. Yesterday we saw the consequences of that decision.

Manufacturing has long been a key part of Missouri's economy, but it is now in jeopardy. Escalating electric rates have put good-paying jobs at risk in Southeast Missouri, for example, Noranda and the 900 people they employ. The retention of existing companies must be as important as attracting new ones. Governor Nixon and his administration should become engaged and ratchet up their effort to find a solution that meets the needs of this critical employer. Noranda has been a good, long-term blue chip company in our state and we should do what we can to see that it will be for generations to come.

Kip Smith, Noranda’s president and CEO announced a series of employment and other actions the company is taking following the PSC’s decision to deny a lower power rate for the New Madrid plant. Please see HIS remarks below from his press conference yesterday:

“Thank you for joining us at the New Madrid plant, which produces 14% of the United States’ supply of primary aluminum and, more importantly, supports the economic livelihood of 900 families in the Bootheel region.

We are here to announce a series of employment and other actions we are taking following the PSC’s decision to deny a lower power rate for our plant. As we have said previously we are disappointed with the PSC’s August 20th decision, especially since Noranda and members of all other consumer groups agreed on a compromise, non-unanimous stipulation that was, unfortunately, not considered. However, Noranda and its employees are a strong organization and a viable company. And we remain committed to securing an affordable power rate.

First, we have already started the painful process of eliminating jobs here at the plant. In total this will reduce our workforce at the plant by 125-200 jobs over the next six months.

Second, we are suspending our 30 million dollar capacity expansion project and will withdraw the expansion permit we previously submitted to the Missouri Department of Natural Resources. Unfortunately, this means that 60 construction and engineering jobs will be lost from the Bootheel.

Third, we are exploring the opportunity to move the construction of our 45 million dollar state-of-the-art rod mill to a neighboring state. While we are committed to building that rod mill and are making progress in its construction, there is a window of opportunity for us to move the rod mill to a site other than New Madrid. If our plant is no longer sustainable in New Madrid it makes no sense to locate the rod mill here. This capital project represents another estimated 60 construction and engineering jobs which would be lost to the State of Missouri.

It is heartbreaking to me to be forced to take actions that eliminate jobs, but these actions are necessary to help us remain competitive in the near-term. At the same time, the long-term future of this plant depends on our ability to secure an affordable and competitive power rate. To that end, we will file a request with the PSC for rehearing and reconsideration of its decision. We believe this request is both appropriate and necessary because a compromise agreement between Noranda and members of all of the other consumer classes in the State of Missouri was not fully considered by the Public Service Commission. We strongly support this consumer-friendly compromise.

If this rehearing is successful, and depending on how quickly an affordable rate can be secured for Noranda, we would be in position to re-evaluate these actions and minimize these job losses. Like other US plants that have survived we need the help and leadership of our State to secure an affordable and competitive power rate. Specifically, we need the support and leadership of our Governor Jay Nixon on this issue. Working together with the other consumers in Missouri and with the leadership of Governor Nixon, we can ensure the economic future for 900 families through Noranda jobs in the Bootheel.”

Noranda Aluminum provides more than $300 million in economic benefits annually to the region. It is crucial that Noranda’s aluminum plant remains competitive. If that plant was to close, it would be very difficult to replace those jobs. These high-quality and high-paying jobs allow those workers to have a positive impact on the communities where they live, both economically and as leaders contributing to the overall quality of life. Noranda’s continued operations and profitability are of utmost importance to all the people of Southeast Missouri. I will continue to keep you informed as new developments arise.