Owing to a labour dispute, Alcoa will eliminate 400 jobs by not reopening a 183,000-tonne-per-year aluminum smelter in Wenatchee, Wash. The plant was idled in July 2001.
Alcoa says it will record a pretax charge of US$20 million in the third quarter to cover the cost of the layoffs.
The Wenatchee smelter was shut down when aluminum prices fell and the cost of energy skyrocketed. Alcoa continued to pay many of the employees, who did community-service work after the shutdown.
With aluminum prices up more than 20% in the past year, the company had sought to reopen the plant but demanded concessions from workers.
Workers represented by the United Steelworkers of America refused to make the concessions, including a contribution to health-care plans that averaged US$72 a month.
Earlier this month, Alcoa reported its second-quarter profit was up 87%.
The company maintains that all its other 20,000 Alcoa employees must make contributions to health-care plans.
Alcoa recently cut production by two thirds at a Quebec aluminum smelter that has been beset by labour problems. About 1,800 workers went on strike in early July.
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