Alcoa Corporation announced today that it will halt curtailment plans for its San Ciprián aluminum smelter in Spain while it reviews a court decision related to a collective dismissal process.
On October 9, 2020, Alcoa announced its decision to curtail the smelter’s 228,000 metric tons of annual capacity and proceed with the collective dismissal of employees after completing four months of consultations with the workers’ representatives at the San Ciprián aluminum plant. The alumina refinery at San Ciprián was not included in the consultation.
The workers’ representatives filed a lawsuit with the High Court of Justice of Galicia, which ruled in favor of the workers on Thursday, December 17, 2020. In the court’s ruling, it declared the collective dismissal process “null and void.”
As a result, in the fourth quarter of 2020, the Company will not incur the approximately $35 million to $40 million it previously announced as an expected charge for employee-related costs associated with the curtailment and collective dismissal process.
In addition, due to a related labor strike at both the San Ciprián aluminum smelter and alumina refinery, the Company will record a negative impact on income before income taxes in the fourth quarter 2020 of approximately $10 million, primarily related to the refinery. The court’s ruling does not resolve the labor strike.
The Company believes it has acted in good faith and in full compliance with the law. The need to restructure the San Ciprián smelter persists due to significant and permanent structural issues.
Alcoa (NYSE: AA) is a global industry leader in bauxite, alumina, and aluminum products, and is built on a foundation of strong values and operating excellence dating back more than 130 years to the world-changing discovery that made aluminum an affordable and vital part of modern life. Since developing the aluminum industry, and throughout our history, our talented Alcoans have followed on with breakthrough innovations and best practices that have led to efficiency, safety, sustainability, and stronger communities wherever we operate. Visit us online on www.alcoa.com, follow @Alcoa on Twitter, and on Facebook at www.facebook.com/Alcoa.
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