Citing profit-eating energy costs in the Lone Star State, Pittsburgh-based Alcoa Home Exteriors Inc. has laid off 75 workers at its Denison, Texas, plant and will transfer some of the facility's production to its two other vinyl siding extrusion plants, in Atlanta and Stuarts Draft, Va.
It is the first-ever layoff in the Denison plant's 20-year history and the first Alcoa Home Exteriors job cut in more than five years.
``The reality is, we have three vinyl plants, and with the energy situation in Texas, we shifted some customers to our other two plants, which are lower,'' said Gary Acinapura, president of Alcoa Home Exteriors, in a Jan. 26 telephone interview. ``This is simply optimizing cost with our current capacity between the three facilities.''
Employees at the Denison plant with the least seniority were the first to lose their jobs, Alcoa officials said.
One Denison economic development official suggests energy prices are not the sole reason for Alcoa job cuts.
``In economic development, you won't see a company that's trying to relocate pull out based on one factor,'' said Tony Kaai, president of the Denison Development Alliance. ``We've had more industry move here in the last 14 months than in the last 50 years.''
This is the first time that a large manufacturer in the north Texas town has cited energy prices as the reason for laying off workers, Kaai said.
``I've never heard that from anyone else,'' he said.
But if 2004 data is any indication, there is money to be saved by paying for energy elsewhere.
According to the Washington-based Edison Electric Institute, the average sales rate for power producers nationwide in 2004 was 5.11 cents per kilowatt-hour. In Texas, that rate was 5.57 cents per kilowatt-hour, while the rates for Georgia and Virginia were 4.45 cents and 4.3 cents, respectively.
Translated to heavy-duty industrial use, the cost difference over a full year would be significant, said EEI spokesman Dan Riedinger.
In addition to vinyl siding, the Denison plant makes soffits and other external wall features for single-family homes and apartment complexes.