End of the line?
HANNIBAL – President and Chief Executive Officer Mike Tanchuk’s Friday announcement that Ormet will cease operations may spell the end for the company that first produced aluminum in 1956.
Over the years, labor disputes and layoffs have been normal for the company. However, after Ormet filed for bankruptcy this year amid increasing electricity costs and decreasing metal prices, the plant’s future is uncertain. Minnesota-based Wayzata had agreed to purchase the factory for $221 million, but would only do so if the Public Utilities Commission of Ohio reduced Ormet’s electric bills. Though the PUCO provided some relief, it may not have been enough.
Along with about 1,000 current jobs that could be permanently lost, there are many Upper Ohio Valley residents relying on pension payments from Ormet.
According to the company’s website, Ormet was organized by Olin Corp. and Revere Copper and Brass Inc. The Hannibal smelter has an an annual capacity of 260,000 tons per year. Ormet’s long history has taken it through the purchase and sale of several divisions linked to the aluminum industry. Over the years, there have been several private owners, while thousands of employees have spent time working in the plant.
There have been multiple bankruptcies, sales and labor strikes.
In 2004, Ormet filed for bankruptcy protection, but emerged from bankruptcy in 2005 in the midst of an 18-month walkout by union employees. However, the company then closed and sold its former rolling mill, which lies to the south of the Primary Aluminum Reduction Plant.
Today, the 122-acre site that once housed the rolling mill is known as the Hannibal Industrial Park, owned by Hannibal Real Estate LLC since the company purchased it from Ormet in 2007.
In July, the Ohio Rail Development Commission approved a $100,000 grant, as well as a $262,225 loan, for railroad construction and renovation at the park. According to the commission, Hannibal Real Estate is investing $30 million to place a steel rolling mill into the facility that once housed Ormet’s rolling mill, which officials believe should create about 50 jobs. The burgeoning oil and natural gas industry is demanding the steel.
However, those 50 jobs are no replacement for the roughly 1,000 jobs that may now be lost because of Ormet’s closure, which could also have an impact on those who have no affiliation with the company itself.
As an already struggling school district that has lost 1,200 students over the last 23 years, the last thing Switzerland of Ohio Local needs is to see Ormet cease operations.
Lance Erlwein, treasurer of the Switzerland of Ohio Local District, said the school district would lose about $109,000 per year in property taxes if Ormet completely shut down and liquidated. At 546 square miles, the district is the largest in terms of area in the state of Ohio. However, the vast majority of this area is rural, which means the district pays large transportation costs.
While the impact may sting, the harsh reality is this is nothing new for Ormet, its employees and the community at large. Pete Gray, a 36-year Ormet worker who serves as United Steelwokers Grievance Committee chairman, said he has seen plenty of drama during his tenure at the plant.
“This is not my first rodeo,” he said. “It is just hard to believe that it may all be over now.”