Unemployment: two calls to action
American workers are going to unusual lengths these days to try to protect their jobs. Case in point: Bob Saunders of Troutdale, Ore.
From his home, Mr. Saunders can look downhill at the Reynolds aluminum plant where he works. Lately, what he has been seeing there does not please him.
The plant is operating at only 20 percent of capacity. Already 500 co-workers are on long-term layoff, and unemployment benefits for half of them have expired. Saunders fears the remaining jobs at the plant, his included, may not be secure.
Reason: a 750 percent rate increase charged to Reynolds and other large users of electric power over the past three years by the federal Bonneville Power Administration (BPA). Under complicated pricing arrangements, what cost 3 mills (.3 cents) per kilowatt hour as recently as 1980 now costs 26 mills (2.6 cents) and soon may go still higher.
Unionized aluminum workers across the Northwest fear the rate hikes will make their already weakened industry so uncompetitive that it will have to leave the region. So, led by Bob Saunders, they are fighting back.
With the blessing of their employers, industry giants like Reynolds, Alcoa, Martin Marietta, and Kaiser, the blue-collar workers have used their manpower and union-organizing skills to take on the BPA directly.
Electricity rates are of critical importance to the aluminum industry because it is heavily energy-intensive. According to Brett Wilcox of Direct Service Industries, an association of aluminum, chemical, and forest-products firms that purchase power from the BPA, 17 percent of the electricity consumed in the Northwest goes to aluminum plants.
Intalco, another leading aluminum producer in the region, estimates the increase in its power costs at $36 million a year. Kaiser estimates a $24 million increase, which - company president A. S. Hutchcraft Jr. announced - would cause a ''reexamination'' of plans for a $600 million modernization of two plants in Washington State.
Indeed, aluminum workers have double reason to be worried about the BPA rate hikes. Demand for their product has been soft for two years, and not only are some of the Northwest plants less modern than those in other parts of the US, but the region also is the farthest from Jamaica, main source of bauxite, from which aluminum is made.
Saunders says the rate hike already has caused Troutdale to drop from third to last in efficiency among the seven ingot plants in the Reynolds system. ''We don't even compete anymore,'' he says. ''The company is trying to computerize and automate wherever possible, but it seems kind of ridiculous to be pumping in any new capital at this time.''
According to Brian Bell, spokesman for the Western Aluminum Producers in Portland, Ore., 3,600 of the 13,000 workers at primary reduction plants in the region are out of work. Unemployment in the Northwest generally is fluctuating between 11 and 12 percent.
On the strength of a petition drive in September that attracted nearly 50,000 signatures in three weeks, an intensive letter-writing campaign directed at the region's congressional delegation, resolutions of support from local chambers of commerce, and other means, the workers sought a face-to-face meeting with BPA senior executives on five days' notice to present their grievance.
The request was at first denied. But, says Saunders, as pressure mounted, ''by Friday, they welcomed us with open arms.''
The workers seek ''equitable power rates,'' assurance of a ''predictable pricing policy,'' and a ''jobs-impact study.'' They have won some minor concessions, but, he admits, ''We've still got a lot of work to do.''
Saunders says the petition drive and other appeals for support were successful because ''aluminum workers are well paid - and they've spent it well.'' The experience also has taught unionists a greater degree of trust in management executives, he claims.
BPA information specialist Bob Reed says the plight of the aluminum workers is a classic case of ''the little guy getting squeezed.'' Under the Northwest Power Act of 1980, the aluminum industry agreed to make up the difference in electricity costs between the federal utility and the private, investor-owned suppliers. The latter sell power to residential users and small farmers.
Since 1980 that difference has risen from 37 percent to 50 percent. Unfortunately, Mr. Reed says, the BPA is ''locked in by law'' to repaying the US Treasury for such costs as operating part of the Columbia River dams as well as power transmission lines. The utility also underwrites the cost of three nuclear power plants in Washington that are not yet on line.
''If any [aluminum] plants leave the region, the first ones to go will be the ones with the highest production costs,'' he says. ''Their motive is to keep rates as low as they can by keeping the pressure on us. But our rates are not discretionary. And we've been falling behind in our repayments.''
''The aluminum companies, in some instances, deal in simplistic terms,'' Reed maintains. Despite the nationwide recession and the rising power rates in the Northwest, he says the BPA has a signed contract with Alumax Pacific Corporation to provide power to a sophisticated new $650 million aluminum plant at Hermiston , Ore., on which construction is still proceeding.
The BPA has modified its billing procedures slightly and agreed to hire an independent accounting firm to review the pricing policies of the privately owned utilities in the region, Reed admits. But the first of eight such reviews found ''no basis'' for adjustment of prices. Meanwhile, the first of 30 formal petitions for rate review against BPA has been heard in the US Court of Appeals, Ninth Circuit, in San Francisco. No one knows when a decision will be announced, a court spokeswoman says.
For its part, the BPA is due to announce still another, yet-to-be-determined rate hike late next month or in February.
Labor historians say the aluminum workers' campaign may be unique to the local union level, but it has certain parallels at the national and state levels in attempts to influence legislation, such as the Clean Air Act.
At the moment, the campaign does not appear to be spreading. John Stewart, assistant general manager for power production with the Tennessee Valley Authority, the other major federally owned electric utility, says there continues to be general customer unhappiness over rate hikes running as high as 14 percent in recent years - ''but nothing that ever reached the kind of organized activity that's going on out in the Pacific Northwest.'' Nor does he expect such a campaign in the region served by the TVA because ''the worst period of rate increases is now over.''
Like Bonneville, the TVA also counts large aluminum plants among its customers, and some of them are inefficient and in danger of closing, too, Mr. Stewart says.
A spokeswoman for the Edison Electric Institute, umbrella organization for 200 investor-owned utilities in all 50 states, says no reports of employee revolts against power rates charged by member companies have reached her office in Washington.
Here's what states owe Federal Unemployment Account (As of Nov. 30, in millions of dollars) Michigan $2,018.2 Pennsylvania 1,972.0 Illinois 1,903.0 Ohio 1,495.0 New Jersey 520.9 Wisconsin 349.4 Connecticut 270.8 Minnesota 263.2 West Virginia 113.0 Rhode Island 101.7 Kentucky 95.7 Missouri 89.8 Puerto Rico 65.7 Arkansas 64.0 Delaware 54.0 D.C. 52.3 Louisiana 47.8 Texas 45.4 Iowa 41.1 Vermont 31.2 Maine 20.9 Virgin Islands 2.9 * Numbers rounded to nearest hundred thousand dollars. Source: US Labor Department
