Alcoa Inc. will close a thermoformed packaging plant in Madison, Ga., one of the first packaging sites to be targeted in the company's plan to consolidate operations.
Pittsburgh-based Alcoa will shut down the plant by the end of September and lay off 106 workers, spokesman Kevin Lowery said July 7. Contracts and equipment from the 156,000-square-foot facility, which makes food trays and containers, will be shifted to other North American facilities owned by Alcoa's Reynolds Food Packaging unit.
The company said June 23 that it would accelerate a global restructuring program that includes plant closings and consolidation. During the next 12 months, Alcoa plans to eliminate 6,500 jobs, which it said will save about $150 million.
The company started some of the work in the first quarter, affecting another 1,800 positions. But on June 23, Alcoa said it would start targeting its global packaging and consumer business and reduce that unit's headcount by about 1,500. Alcoa's automotive, aluminum production and mill units also are targeted.
Overall, Alcoa officials said 121 locations globally are part of the restructuring.
``While eliminating jobs is unsettling, we will do our best to minimize the impact on our employees and the communities where they operate,'' Alcoa Chairman and Chief Executive Officer Alain Belda said in a news release.
The Georgia plant, open since 1970, is one of the oldest and smallest Reynolds Food facilities, Lowery said. Ivex Packaging Corp. bought the plant in 1989, and Alcoa bought Ivex in 2002.
The facility sits on 17 acres in Madison, a small community about 55 miles east of Atlanta, said Ralph Vaughn, president of the Madison-Monroe County Chamber of Commerce. The Madison-based group will help Alcoa sell the building and land, Vaughn said.
The plant makes snack-food containers for Kellogg Co. and its Keebler Foods operation, and makes a variety of deli and baked-goods trays and containers, Vaughn said.
Alcoa invested more than $2 million in new equipment last year at the location and was considering adding more equipment, he said.
``Because of the investment from Alcoa, we were somewhat taken by surprise when they wanted to close it,'' Vaughn said July 7. ``They told us that the price of petroleum and the cost of making plastics was high and that competition was great. But there's always heartbreak when 106 people are displaced by unemployment.''
Reynolds Food has 17 facilities globally, including 10 in the United States, Lowery said. The company has not decided which facilities will receive the equipment and work from the Madison plant, he said.
Lowery intimated that other packaging plants could be on Alcoa's targeted list for closings. Besides thermoforming, Alcoa also performs injection molding and film extrusion in its packaging area.
In thermoforming, Alcoa ranked fourth last year in Plastics New's ranking, with an estimated $350 million in relevant North American sales.