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On 11 and 12 February the representatives of Alcoa’s European Works Council and Central Management for Europe met in Madrid. This was the second information and consultation meeting after Alcoa officially announced in Pittsburgh its intention to dismiss 13,500 permanent employees and 1,700 temporary employees throughout the world and to sell four business areas.
Representing Management, the following persons participated in the meeting in person or by teleconference, submitting updated reports:
Rudi Huber, President for Europe
Frank Littaye, C&B and Labour Relations Manager
José Ramón Camino, President for Spain
Hugues Salle, GBS & RU, Human Resources Manager for Europe
Manuel Ruano Cristóbal EMP, General Manager
Jon Jensen, AEES President
Ken Giacobbe, BCS, Financial Manager
Tammi Buckley-Jones, BCS , Human Resources Manager at Kawneer UK
Scott Kerns, ATP, Vice President and General Manager
Rudi Huber – Alcoa Europa
Presentation and report on all Alcoa activities in Europe.
We are now going through the greatest global crisis that has ever occurred.
The Group’s total stock market value has fallen from 28,000 million in April 2008 to 6,000 million in January 2009. Alcoa is not alone in having this problem. All global business groups are facing the same trouble.
For example, BHB Billiton has dropped from 215,000 to 90,000 million, and Rio Tinto, from 148,000 to 34,000 million. Aluminium prices on the world market have plummeted by 56% in the last five months. We have to focus on the activities where we can be market leaders. Right now no major acquisitions are scheduled. I believe and fear that in 2009 there will be further painful losses of ground.
Hugues Salle – GBS (Global Business Services):
Elimination of around 60 jobs in Europe.
The headcount reduction breaks down as follows:
EBS 8 jobs in the Netherlands, Belgium and Germany;
HR 20 jobs, 7 of them in Spain, 6 in Italy and 7 in Hungary;
HRMS 2 jobs in the Netherlands and Hungary;
FAS 10 jobs in Hungary;
ISD 10 jobs in Italy, Hungary and Spain;
Also, another 10 jobs in the GBS division, due to the expiration of the service agreements with SAPA and Hanks.
To date we have yet to receive more-specific information for each country or any information about why precisely 60 employees are going to be dismissed.
The hope is for the workforce reduction to take place preferably through voluntary resignations and early retirements.
Manuel Ruano Cristóbal – Global Foil
For the Global Foil division (which has plants in Sabiñánigo, Spain, with 178 employees, Shanghai, China, and Itapissuma, Brazil), there are seven possible strategic buyers and 22 financial companies potentially interested in purchasing the division. Over the next two weeks talks will be held with them all, where it is hoped a number of issues will be settled. Amorebieta is providing the Sabiñánigo plant with materials for foil production. If the foil business were sold, this chain of supply would no longer be guaranteed, and Alcoa could not force the future buyer to maintain it.
According to Manuel Ruano, Amorebieta could sell its products on the free market too, if the future buyer refuses to maintain the chain of supply. The question put to Management ―Why not take advantage now of the possibility of selling Amorebieta products on the free market and thus earning market share and additional turnover?― remains open. The same goes for the question of what will happen with the approximately 500 Amorebieta workers if a future buyer of the Global Foil division does not want to procure material at Amorebieta.
Jon Jensen – AEES (Alcoa Electrical and Electronic Systems)
Alcoa has announced its decision to sell this entire European business unit, without providing any more-specific information about possible buyers or outlooks of any kind for the 9,000 colleagues affected in Germany, Ireland, Rumania, the Czech Republic and Hungary. In the last six months there have been drastic, massive dismissals in Germany, AFL Frickenhausen (140); Hungary , AFL Mor (650); the Czech Republic, AFL Stribro (650) and Rumania (200). In all these cases the current economic situation has been cited as the reason. In no country has the possibility of reducing the working day for several months been implemented.
Everywhere preference has gone to mass firings. In our capacity as the European Works Council, we harbour the suspicion that these dismissals are aimed at grooming the AEES division to look more attractive to potential buyers.
In the process of selling the division, Alcoa will not force the potential buyer to assume any commitments at all to protect current employees.
Talks are being held with several parties that are interested, although a great number of issues still remain to be settled. Jon Jensen thought the sale might take place late in the second quarter of 2009.
In Hungary, at the Mor plant (AFL, 2,400 employees), another 100 dismissals are now scheduled in the Electronics area. We have had no answer at all to the question of why not reduce the working day if the sale of the entire division is imminent. However, even though the entire AEES division is scheduled to be sold late in the second quarter of 2009, Jon Jensen says Alcoa has got an AEES strategy and business forecast covering the next three years. We do not know the extent to which these plans have been prepared on behalf of a future owner, or whether they are instead Alcoa’s own plans and strategies.
Charles McLane, Junior Financial Manager and Executive Vice President, declared on 12 January 2009 that this quarter the Electrical and Electronic Solutions division was put on the list of activities Alcoa wishes to let go (and the measure may even have been anticipated some quarters ago).
According to Jon Jensen, no other dismissals or workplace closures are anticipated.
Ken Giacobbe and Tammi Buckley-Jones – BCS (Building & Construction Systems)
The company has referred to the need to cut costs, and it plans to dismiss 27 persons from BCS Kawneer in the British Isles, 19 of them in England and 8 in Ireland.
To the question of whether more dismissals at BCS are scheduled, Ken Giacobbe replied that at BCS they study the market and the situation of each workplace on a daily basis, and they also take decisions every day. In our capacity as European Works Council we cannot see a multinational company like Alcoa only making plans for its operations and the future development of the business area and workplaces one day at a time.
No other dismissals or workplace closures are scheduled at this time.
Scott Kerns – ATP (vehicles, transport)
Sale of plants in Modena, Italy, with 94 employees; Soest, Germany, with 269 employees, and Köfem, Hungary, with 108 employees.
Talks with possible buyers have just started. Alcoa would prefer a buyer who comes from the same sector.
Right now the Soest Works Council is trying to introduce a temporary reduction of the workday by exercising its legal rights to co-management. In this way it is endeavouring to keep Management from putting the scheduled dismissals into practice shortly before the sale.
A chart was presented to try and explain to us how many of the 13,500 permanent jobs and 1,700 temporary jobs Alcoa plans to eliminate are in Europe. As the presentation proved not to be internally consistent, Management withdrew it for modifications.
Regrettably, even after the second meeting with Alcoa’s Management we are still unable to report further details. The European Works Council considers the information furnished both insufficient and incomplete. Since Alcoa’s announcement of 6 January 2009, thousands of European workers have been waiting for more information and clear answers from Management. The head of one European division is making fresh forecasts every day, while another is drawing up three-year plans, even though the business is going to be sold inside a few weeks. A third is even today unable to tell the European Works Council how many workers in his business area are going to be dismissed and in what countries.
The industrial plans we had requested and been promised for each European division remaining in Alcoa and not sold were not facilitated at the meeting either, nor were we given the 2009 investment plans for these business areas.
We are deeply concerned that Alcoa is giving preference to dismissals instead of making exhaustive use of the system of temporary working day reductions in each country and thus offering workers better outlooks, even if only in the short term, and perhaps an opportunity with a new owner. The fact that, in the sale of the four divisions (AEES, ATP and Global Foil in Europe and Cast Auto Wheels in the USA), Alcoa is not requiring potential buyers to make commitments in the defence of workers or workers’ acquired rights is more than disappointing for thousands of Alcoa employees and for the members of the European Works Council.
The European Works Council asked Alcoa Management: Are there any forecasts or intentions to sell or close other divisions or particular workplaces as well?
Management’s reply was: Measures as drastic as that cannot be ruled out for the future, although at present there are no plans to take any such measures.
This contradicts the declaration made on 12 January 2009 by Charles McLane, Junior Financial Manager and Executive Vice President, who said that, as regards special items, the removal of obsolete stock from the balance sheet falls within the sale or shutdown of certain workplaces and is therefore calculated as part of the operating costs.
The European Works Council asked Alcoa Management: Is a subsequent workforce reduction thinkable? The reply of Management was: Measures as drastic as that cannot be ruled out for the future, although at present there are no plans to take any such measures.
We put these and many other questions to Management in writing before the meeting of 11 and 12 February in Madrid. We also received Management’s answers in writing before the meeting. At the meeting we were told by our Hungarian colleagues that the dismissal of another 100 colleagues is forecast at Mor (AFL).
We consider that this type of information and consultation with the European Works Council, which is a body with a legal foundation and has a legally enforceable right to receive information, is not compatible with Alcoa’s values.
The 2009 salary freeze at all workplaces will be worth approximately 6,700,000 dollars to Alcoa, according to statements by Management. We wonder where the truly explosive profits of 2007 (a record-breaker in Alcoa’s history as a company) have gone. They were not distributed among the employees of Alcoa, nor, apparently, were any reserves set aside. Fourteen months later 15,200 colleagues are dismissed and divisions and workplaces employing 22,600 colleagues are being sold, while those who will be staying at Alcoa have got to give up part of their salary.
In 2002 Alcoa had 127,000 employees
Right now it has still got 97,000 employees
Cutback through dismissals and sales 37,800 employees
Therefore, in the last six years 67,800 jobs have been eliminated at Alcoa, and once all the scheduled measures have been put into practice only 59,200 workers will remain at Alcoa.
Trade union representatives from some European countries participated in the Madrid meeting as well, and we also called for the presence of an expert, Michael Bach, from the German metalworkers’ union, IGM, to provide support for us in our work. They have all assured us of their help and support, within their respective national possibilities. Petra Molenaar, of FNV-Formaat, the Netherlands (our European Works Council’s advisor), is also a great and important help to us. We remain in close contact with union representatives, the European Metalworkers’ Federation (EMF) in Brussels and naturally you, our colleagues from Europe, and we will continue to keep you informed.
Alcoa Management anticipates holding another meeting with us, the Alcoa European Works Council, in March.
We will report to you again after that meeting as well.
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