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Workers, Retirees Express Concern

October 5, 2013

NEW MARTINSVILLE — Her husband being a 32-year Ormet employee, Judy Mason said her family has been through many strikes and layoffs over the year....

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(12)

Ragnar

Oct-06-13 12:02 AM

I take no joy in Ormet's demise. I have no skin in the game. But I do believe that no company should be rewarded for incompetence. Ormet had a cash payment from Glencore, a sweetheart power deal, a favorable labor contract, a pension plan that it neglected and a business model that was 100% dependent on the LME price of Aluminum.

If any one of those things went wrong (and several did), Ormet was finished. This is no way to operate a business.

Ormet also received $145 million in income tax subsidies, in just three years, as well as tax credits from Louisiana for the reopening of Burnside.

I will say this. If any of the current employees were involved in the most recent strike, they deserve to lose their jobs and be blacklisted.

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Ragnar

Oct-05-13 11:58 PM

"PUCO directed that any rate discounts provided to Ormet must be directly related to employment levels. Under the arrangement, Ormet will be required to maintain an employment level of 650 full-time employees. Ormet’s discount will be reduced by an additional $10 million each month for every 50 workers below 650 full-time workers employed by Ormet for the previous month. Ormet will be required to provide a monthly report to PUCO staff and AEP detailing its employment levels."

I know.

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BigMike

Oct-05-13 9:59 PM

Ragnar:

The "headcount" was and still is part of the terms of the power agreement. If they reduced headcount the power rate would increase.

Stop embarrassing yourself.

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Ragnar

Oct-05-13 8:14 PM

BigMike

Ormet dropped their lawsuit because it never would have held up in court, and because arbitration may have been required by its' tolling agreement with Glencore. Glencore paid a minor ($30 million?) payment to Ormet and the contract ended once 2009 alumina had been received and processed.

At that time, Tanchuk crowed about the arbitration win, labor cost reductions and new AEP agreement set to run through 2018.

In the process, he lost a valuable, powerful partner, did not reduce headcount and then tried to get out of a power agreement he gladly made, just 4 years ago.

Ormet should have been out of business years ago.

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BigMike

Oct-05-13 7:27 PM

For a few seconds I thought you might have some credibility until I read this "For a few years, Ormet bought their raw material from one supplier and sold 90% of their finished product back to that supplier. Then they sued that supplier to get out of the contract! "

I am quite familiar with Ormet's suit against Glencore.(Glencore)used a bogus claim of force majeure to get out of a tolling agreement with Ormet (because metal prices had declined). Ormet filed for a preliminary injunction against Glencore, when Glencore stopped supplying Ormet with alumina in violation of that tolling agreement. The suit was dropped when Glencore reluctantly resumed alumina shipments. The issue was later resolved in arbitration.

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Ragnar

Oct-05-13 2:23 PM

So what if AEP made a tiny profit?! AEP operates in something like 12 or 13 states, operating dozens of power plants, hundreds of barges, etc. and buying and selling power nationwide across a huge transmission network.

Ormet operates a small plant in a depressed area of Ohio, producing a product whose prices are depressed.

For a few years, Ormet bought their raw material from one supplier and sold 90% of their finished product back to that supplier. Then they sued that supplier to get out of the contract!

For the three year period of 2009-2011, Ormet earned a combined pre-tax profit of $59.42 million and a POST tax profit of $204.31 million. This means that Ormet received a subsidy of $145 million over three years, courtesy of taxpayers. That money had to come from someplace and it did not come from Ormet.

Ormet stock reached a high of over $200 per share just 6 years ago and it is now at $0.50/share. Should have shorted it!

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bloomin

Oct-05-13 1:55 PM

Sorry for all of those who have lost their jobs and for their families. Im not so confident that they will find jobs that come near to replacing their earnings and benefits. I cannot see blaming AEP-dont think they are going to negotiate costs with individuals who are struggling.

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sparky75

Oct-05-13 11:44 AM

Retirees should be concerned because Ormet. .did not pay for their retirees to be eligable for the PBGC.They were way underfunded

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mharrison

Oct-05-13 10:38 AM

Ormet has had problems for years. Too many layers of office workers, in the end doing much of the same work. Retirees benefiting infinitely. Strikes ending with better______. Did the AEP just become a 'problem' or could there have been some budgeting and future planning by Ormet? Many sides to blame but many won't admit it.

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mharrison

Oct-05-13 10:34 AM

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SpankysLastDance

Oct-05-13 8:52 AM

Years and years of strikes and labor disputes and a crappy market for metals has nothing to do Ormets problems.It's that big mean old Utility provider.

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atoddh

Oct-05-13 8:26 AM

I am amazed these folks feel the AEP shareholders should support them.

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