State, Federal Help Essential
It appears the Ormet Corp. has few friends outside the Ohio Valley. The Public Utilities Commission of Ohio seems to be showing little interest in helping the firm deal with its gigantic electric bills. The federal Pension Benefit Guaranty Corp. doesn’t like Ormet’s plan to come out of bankruptcy.
And this week, it was revealed American Electric Power is suing Ormet for $8.9 million over unpaid electricity bills.
Meanwhile, emergency funding intended to get Ormet over a financial hump until it can emerge from bankruptcy is running out. One of the four aluminum smelting potlines still in operation at the Hannibal plant may shut down within weeks.
Talk about having your back against the wall.
Struggle is nothing new at Ormet, of course. The company has met and conquered financial problems for years. Chief among them have been the cost of electricity and fluctuating prices for aluminum.
But this time may be different. A formidable lineup of challenges faces the company.
If they can be overcome, Ormet may yet face a bright future.
Through a plan with Wayzata Investment Partners of Minnesota, Ormet could come out of bankruptcy with a new owner. But that strategy is opposed by the PBGC, which would have to take over the company’s pension obligations for the Wayzata agreement to work.
Also critical is whether Ormet can obtain a new agreement from AEP to furnish power to the Hannibal plant, where electricity accounts for about 60 percent of the cost of production. Actions by the PUCO and AEP put such an agreement in doubt.
But if Ormet is allowed to fail, the Ohio Valley will suffer terribly. More than 1,000 men and women work at the plant. Schools and local government in Monroe County depend on tax payments by Ormet.
Closure of the plant would be one of the worst blows to the area’s economy in many years.
Ohio Gov. John Kasich’s office has attempted in the past to help Ormet. Kasich should take a personal interest in intensifying state government efforts on behalf of the company. Members of Congress from Ohio should make their concerns clear to the PBGC.
Here in the Ohio Valley, closure of the Ormet plant is virtually unthinkable. That attitude needs to be transferred to Columbus and Washington.