MASSENA, N.Y. — Alcoa Inc. (NYSE: AA) has adjusted its contract with the New York Power Authority (NYPA) to continue operating in Massena in St. Lawrence County, saving nearly 500 jobs.
The New York City–based firm will maintain “at least” 600 jobs at the plant for the next three-and-a-half years, Gov. Andrew Cuomo and U.S. Senator Charles Schumer (D–N.Y.) announced in a news release the governor’s office issued on Tuesday.
The aluminum manufacturer on Nov. 2 had announced plans to curtail its smelting operations at its Massena West plant by early next year.
The move would have eliminated at least 487 jobs, leaving just 217 positions for other functions at the plant, according to the release.
The agreement, which is retroactive to Oct. 1 and continues through March 31, 2019, provides various state incentives to Alcoa and includes “significant” financial penalties if the company defaults or terminates the deal early.
Under the new pact, Alcoa will be required to employ at least 600 full-time employees throughout Massena West.
The company will also offer a voluntary retirement package to eligible employees, the lawmakers said.
The agreement “strengthens an essential part” of the North Country economy and saves hundreds of jobs in the region, Cuomo contended in the release.
“This agreement also protects the state’s investments, ensuring that taxpayer dollars are spent wisely and that Alcoa lives up to its promises,” Cuomo said.
Alcoa says the deal helps it withstand a difficult commodity market.
“Today’s agreement helps better position the smelter in light of prevailing market conditions, providing this facility a bridge to a stronger commodity market and maintaining jobs in the North Country,” Klaus Kleinfeld, chairman and CEO of Alcoa, said in the release.
Besides the employee requirement, the pact also calls for NYPA to provide low-cost hydro power. But the state will increase the rate on the low-cost power as the price of aluminum increases in the global metals-exchange market.
In addition, Empire State Development will provide capital and operating-expense support totaling $38.8 million over 3 1/2 years.
Alcoa also agreed to face up to $40 million in penalties should it breach or terminate the deal. The amount of the penalty would gradually decline by the end of the term.
The agreement is subject to approval by the NYPA board of trustees, which is set to meet Dec. 17.
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