Rescue for Alcoa smelter but jobs to go

A federal/Victorian government rescue package of more than $40 million will keep Alcoa's Victorian smelter open for at least another two years, but the company says dozens of jobs will go.

The company will receive $40 million in commonwealth funding and an unspecified amount from the state government to make its struggling Point Henry site - which employs about 600 people - more efficient.

Alcoa Australia chairman Alan Cransberg announced the news on Friday after a three-month review of the Victorian operation, saying he was optimistic about the smelter's future.

But he said about 60 jobs were likely to be lost and the company would seek voluntary redundancies soon.

'There are some tough times ahead, we still have some difficult things we need to do, but we're very confident of running this plant at least until 2014, and over that period making sure that we can create a future for it beyond 2014,' he told reporters.

Mr Cransberg said the company had poured hundreds of millions of dollars into the smelter in recent years only to suffer 'unsustainable losses', and changes were needed in its production, supply chain and management.

Federal Innovation Minister Greg Combet said the rescue package required Alcoa to invest in better productivity, keep the smelter open until at least July 2014 and maintain production levels.

'We want to work together to ensure that this smelter achieves ongoing viability, because it will ensure the future of almost 600 direct jobs and hundreds if not thousands of others in the region,' he said.

Victorian Premier Ted Baillieu said the government had a policy of not revealing how much money it committed to prop up industries. The state had made a 'modest contribution' to Alcoa and pledged an additional $4 million to an industry fund for contractors and suppliers in the region who work with the company.

'This is very much a part of this region, a part of Geelong and a part of Victoria, and we do want to see Alcoa flourish,' he said.

Unions said the announcement was a huge relief for workers.

Australian Manufacturing Workers Union (AMWU) national organiser Liam O'Brien said workers were productive, but they could cope with job cuts.

'We've seen job losses over the last decade. Twenty years ago there were 1000 people working here producing a lot less aluminum than we are today. We are a very productive workforce,' he said.

The Australian Workers Union (AWU) national secretary Paul Howes said it was an important turning point for Point Henry and hopefully set the smelter on a path towards long-term sustainability.

Bill Guinane, a maintenance manager who's worked at the plant for 10 years, said the announcement would ease many workers' worries.

'People have been anxious,' he said.

'Now there's an opportunity to move forward and set the place up for the future.'

Source: http://rss.skynews.com.au/c/34485/f/628636/s/20d5f791/l/0L0Sskynews0N0Bau0Ctopstories0Carticle0Baspx0Did0F7662530GvId0F/story01.htm

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