Alcoa’s Quebec Workers Agree to Reduce Working Hours

May 1 (Bloomberg) -- Alcoa Inc., the largest U.S. aluminum producer, reached an agreement with unionized employees at the Becancour smelter in Quebec to reduce hours worked in exchange for keeping all production lines running. Employees voted for a three-year contract that gives them salary increases and other benefits while reducing their hours by 15 percent, the United Steelworkers said today in a statement. The accord was supported by 93 percent of the 866 workers who voted, the union said. The agreement averts a shutdown of one of three aluminum production lines at Becancour, which is 75 percent owned by New York-based Alcoa. The company said on April 13 that it might shut one line, or about 136,000 metric tons of annual output, by the end of April without an agreement to cut labor costs by 15 percent. Rio Tinto Group, based in London, owns the rest of the plant. The accord, effective July 1, gives workers a 1.9 percent salary increase for the first year, 2.5 percent in the second year and 3.3 percent in the 16 months beginning July 1, 2011, union spokesman James Maloney said in a telephone interview. The contract will be voided and employees will revert to a 40-hour work week if market conditions worsen and Alcoa is forced to shut the production line, Maloney said. If that occurs, the union expects to negotiate with Alcoa over workforce reductions, he said. Global Production Cuts About 20 percent of Alcoa’s global production has been cut since aluminum prices began falling last year. The company started negotiating with about 3,500 unionized workers in Canada last month to reduce payroll costs by 15 percent. “We’re happy we were able to get a new contract as well as achieve the cost reductions,” Kevin Lowery, an Alcoa spokesman, said in a telephone interview. Alcoa rose 62 cents, or 6.8 percent, to $9.69 at 4:15 p.m. in New York Stock Exchange composite trading. The shares have fallen 14 percent this year. Aluminum for delivery in three months has declined 46 percent in the past year on the London Metal Exchange.