Alcoa Requests Further Delay in Restarting Operations at San Cibrao Plant
Alcoa, the largest aluminum producer in the U.S., has once again approached the works council to request a postponement in the restart of 32 vats at its San Cibrao aluminum factory, located in Cervo (Lugo). Originally scheduled to resume operations on April 1 this year, the company is now seeking to delay this restart due to financial concerns.
Alcoa has communicated to its employees the expectation of "substantial losses" at the San Cibrao plant this year, leading to the exhaustion of the currently available financing in the upcoming months. In light of this situation, Alcoa is exploring all possible avenues to alleviate these financial challenges. The firm is committed to seeking actions that would make the business viable and is requesting "flexibility and support" from all involved parties.
The delay in restarting the vats is seen as a strategic move to "protect the available cash." Alcoa views this postponement as an opportunity, noting that proceeding with the planned restart under current financial conditions would not make "economic sense." The company has called for a response from the committee before the upcoming Wednesday and has scheduled a meeting with the workers' representatives at 10.00 a.m. on that day to discuss the issue further.
Background and New Roadmap
The production of primary aluminum at San Cibrao was halted in January 2022, following an agreement with the workers' representatives in December 2021. This agreement initially entailed a two-year cessation of plant activities. In February 2023, there was a modification to this agreement, with Alcoa planning to gradually restart primary aluminum production in January 2024. The plan included reactivating 32 vats on April 1 and returning the factory to full capacity by October 2025. However, due to the current financial situation, Alcoa is now proposing another change to this plan, seeking to delay the restart of operations.
Alcoa emphasizes that this measure is being taken in the interest of the San Ciprián complex and its workforce. The situation underscores the complexities and challenges faced by major industrial operations in adapting to changing economic conditions.
