Nevertheless, Hydro, local management and employees are fighting for the Rheinwerk to survive.
“Already in the autumn of 2008, Hydro’s Primary Metal business area management involved us in their deliberations, which were based on a very pessimistic outlook for 2009. In the “Restructuring Rheinwerk” project, employee representatives have been included and kept update. Hydro management treated us fairly, and they still do,” says Günther Appelstiel, who is chairman of the works council for the Neuss plant and for Hydro’s legal entity in Germany. He also represents employees on the supervisory board of that organization.
Appelstiel notes, however, that the works council is not convinced that every opportunity has been fully used during each of the stages of the development. “We think that the catastrophic losses start of 2009 could have been minimized had Hydro taken precautionary measures more upfront, already in the second half year 2008,” he says. “But, well, that’s history.”
Also tough in 2005-06
He also points out that history, or the change in market conditions, has played hardball before on the employees in Neuss. “We went through a terrible time in 2005 and 2006,” he says, “when the Hamburg and Stade smelters were closed.”
At that time, the plant took massive measures in cutting costs, after German power prices began skyrocketing for industrial users in the liberalized power market, compared to the previous routine of long-term, affordable energy contracts.
“So, we stretched our good operational efficiency even further to absolute top levels. My colleagues and I also swallowed bitter pills, agreeing to reduced effective salaries. It was tough,” says Appelstiel. “Then, the economy went up, the aluminium price on the London Metal Exchange, too. Throughout 2007, until the summer of 2008, we thought ‘this pain is overcome.’ It all looked rosy.”
But with a steep fall of the LME price for aluminium and more expensive power rates, starting from January 1, 2009, the financial losses from producing aluminium at Rheinwerk became horrible: EUR 350,000 each day. “Surely this was unacceptable, and we all were shocked,” says Appelstiel. “But we also perceived that Hydro did not have a survival strategy, then.
“In addition, this was just the time when we had a substantial change in management. To us, it looked first like an endgame. After several meetings with Hydro managers, we felt like we were already dead or, at least, mothballed.”
Mobilizing is key
Mobilizing the public, media, and politicians from local to national level became crucial to open up all parties for the common understanding that urgent help was needed to avoid a sudden closure in Neuss. “I think we - the employee representatives and unions - have been most proactive on this. And I am really happy that we stayed determined, also showing a strategy to continue production at a low level to our business area management,” says Appelstiel.
All in Neuss felt relief when Hydro decided to carry on for some more time, at 50,000 tonnes per year. And hope arose further, when, shortly after, German politicians committed themselves to push for aid or compensation.
A fair solution
“Well, as a large power customer,” says Appelstiel, “we have been financing energy policy subsidy policies before, with hundreds of millions of Euros. So we deserve a fair treatment now, and we still hope that Germany and the EU Commission will finally come up with a solution that really helps.”
The German works councils consider having Svein Richard Brandtzæg as Hydro’s President and CEO as being an extreme advantage. “We know each other well from his time in Germany and in the supervisory board of Hydro Aluminium Deutschland GmbH,” says Appelstiel. “He has deep insight into the German situation, and we trust this will help him in his decision-taking. In addition, there is an open and constructive relationship with the employee representatives.”
Useful contacts
In particular, Appelstiel appreciates that Hydro management clearly promoted and supported close contact between German and Norwegian employee representatives by forming the European Works Council. “At the beginning, we not only had communication problems, but a different approach,” Appelstiel says with a smile. “But after visits in Norway and Germany, there grew a mutual understanding of the individual structures of employee representation. We Germans in particular have a foundation of co-determination and employee representation as works councils, which is different from others.
“Today, we can say that we are one panel which jointly acts for the interest of employees. However, on that note, we should not forget that we belong to a Norwegian company.”
In the same boat
Günther Appelstiel is sure of two facts. “Number one, we are sitting in one boat today with our Norwegian colleagues, because an EU ruling on the cost of power and carbon dioxide emissions is becoming more and more likely for our industry, and it will later affect the smelters up north, too,” he says. “Secondly, Hydro, as a focused aluminium company, has proven that they don’t want to just shut down our plant, they just need - and we need – an improvement in economic conditions and results to secure the survival of Rheinwerk.”
