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Shuttered Ferndale smelter could resume operations

Facility laid off 700 employees in 2020

The Alcoa Intalco aluminum smelter may reopen its doors after two years of curtailment.
The Alcoa Intalco aluminum smelter may reopen its doors after two years of curtailment. (Hailey Hoffman/Cascadia Daily News)
By Julia Lerner Staff Reporter

When Ferndale’s Alcoa Intalco aluminum smelter shuttered its doors in mid 2020, Paul Shuey didn’t know what he would do. With few other opportunities for someone who knew how to run an induction furnace, he was unemployed and lost. 

“I was devastated,” he said. “It was everything I knew. I got hired in my 20s, and I hoped all the way up until the very end that they’d change their mind and stay open. For them to just throw their hands up and walk away, it was just devastating to me.”

Shuey, 44, was one of more than 700 Alcoa Intalco employees who lost their jobs when operations were stalled in the early stages of the COVID-19 pandemic. The facility remains functional and maintains a skeleton crew of security guards. 

“They did spend quite a bit of time and money shutting down and preparing the equipment to just sit idle,” explained Ferndale’s mayor Greg Hansen. “It was in the early stages of the pandemic, so adding that on top of everything else we were dealing with, it was quite a blow.”

“We make things; it’s part of Ferndale’s DNA. To lose Alcoa was a real blow, not just from an economic standpoint, but for the community’s psyche, that we lost one of our big industries. It was like a doomsday proposition for Ferndale.” — Greg Hansen, Ferndale Mayor

Alcoa told employees the company could not compete in the global market for aluminum as production costs rose, aluminum prices fell and foreign competition increased. The facility gave notice in May 2020, and had ceased operations by August, Hansen said.

“The Intalco aluminum smelter remains curtailed due to numerous challenges that limited its global competitiveness for the long term,” Jim Beck, vice president of corporate communications for Alcoa, told CDN. “As with any curtailed site, however, we continue to review options for the site, which is being maintained as part of our company’s total smelting capacity.”

Alcoa, though, may not be responsible for the site much longer. While the smelter remains curtailed, several companies have expressed interest in the facility, including one that would resume aluminum operations and another that would convert the facility to a steel plant. 

Blue Wolf Capital Partners LLC, a New York City-based private equity firm, is currently in negotiations with Alcoa and local utilities companies regarding the facility. 

“They are talking with Alcoa about the possibility of purchasing the site, and they’ve been talking with the Bonneville Power Administration (BPA) about new contracts for electricity for that site to reopen it as a green aluminum smelter,” Hansen said. 

Alcoa’s smelter was a significant aspect of the local economy, and the closure of the facility had rippling effects.  

“We make things; it’s part of Ferndale’s DNA,” Hansen said. “To lose Alcoa was a real blow, not just from an economic standpoint, but for the community’s psyche, that we lost one of our big industries. It was like a doomsday proposition for Ferndale. To see the facility reopen would be a real boost to the morale of our community.”

Though it would bring jobs back to the community, Hansen has some concerns about the facility resuming operations in Whatcom, even if the proposed restart proved viable. 

“Where are employees going to live?” he asked. “Even before the pandemic, we were struggling with a pretty significant workforce housing shortage. It’s hard for somebody working with a family with a single income to buy a home. There’s a lot of bittersweet excitement over the possibility of the site reopening because there’s also that concern of, where are they going to live?”

Staffing shortages, too, have plagued industries throughout the pandemic. 

“Seven hundred union jobs would be very meaningful,” Hansen said. “But there are a lot of industries that pay in the same compensation range that are struggling to find enough employees to ramp up to full production.” 

Contracts with BPA may be the biggest hurdle to reopening the facility, Hansen said. 

“A strong source of electricity is critical for manufacturing aluminum and in a lot of ways, the only way that Alcoa remained here over the last 10 years is because they were able to negotiate price breaks with the BPA,” he said. “Otherwise, it requires so much electricity that it becomes cost prohibitive.”

Blue Wolf did not respond to CDN’s requests for comment. 

The project, though, could receive a financial boost from the state. In December, Governor Jay Inslee put forward a $626 million climate budget supporting green projects across the state, including some funding for a plant relaunch. 

The proposed budget includes $7.6 million designated for the project through the Clean Energy Fund. 

“The proviso language [in the budget] says when the facility is operational it should reduce emissions by a minimum of 750,000 tons per year, increase energy efficiency, and protect or create aluminum manufacturing jobs in Whatcom County,” said Mike Faulk, Inslee’s deputy communications director and press secretary. “If [the funds are] not used by June 30, 2025, the funds would be used instead for clean energy investments.”

The budget is currently in review by the state Legislature, and will be finalized in March. 

Shuey, in his third year as a Ferndale City council member, hopes the facility reopens, and would love to return as an employee. 

“You feel like you’re missing a part of your life by not being there,” he said. “It would feel like going back home, like where I’m supposed to be.”

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