Clean Air Costly for Arizona Town : Closure of Copper Smelter Will Slash Jobs, Tax Revenue

The copper smelter that breathed life into the economy and pollution into the air in this small border community is about to close, leaving Douglas a company town without a company.

After a long battle that pitted environmentalists and government officials against Phelps Dodge Corp. and local supporters, the company was ordered to close the plant no later by Jan. 15.

Phelps Dodge said the cost of installing equipment to reduce sulfur dioxide emissions to continue operating would be more than the smelter was worth.

The closing means a loss of jobs and tax revenue for a town so tied to the copper industry and to Phelps Dodge that it was named after a turn-of-the-century company president, Dr. James Douglas.

Some workers from the Douglas plant may be moved to a copper smelter near Silver City, N.M., in which Phelps Dodge is buying a two-thirds interest. But there’s no way that smelter can hire all 347 workers about to lose their jobs, said Sam Sorich, an official of the Douglas smelter.

For the community, the closing means the loss of a $9-million annual payroll, by far the biggest in this town of about 14,000.

“The loss of that kind of a payroll for the community is going to be substantial,” said acting city manager Dave Kincaid, adding that the smelter had an overall $27-million impact on the local economy each year.

The next two largest payrolls are $6 million for schools and $4.5 million for the city, he said, but local government could suffer from a loss of tax money.

The town will lose $170,000 a year in property taxes paid by the smelter, and that doesn’t take into account any losses of tax money from workers who eventually may leave town, Kincaid said.

Residents Bracing Themselves

Residents are bracing themselves and hoping they can weather the death of the smelter as they’ve withstood violent copper strikes and economic downturns of the past.

“We’ve gone through a very pessimistic stage down here, and it appears to be pulling the community together,” Kincaid said. “We’re resigned to the fact that it’s going to close.”

City officials hope the local economy will be helped by the growth of so-called maquiladora plants in the neighboring Mexican city of Agua Prieta, where workers assemble U.S.-made parts into finished products that are returned across the border. Although they provide few jobs on the Douglas side, most of the Mexican workers do business with Douglas merchants.

That helps somewhat, Kincaid said, but Mexican workers don’t have as much money to spend as U.S. workers, and shoppers crossing the border won’t bring back any lost property taxes.

In recent years, such companies as Zenith, Velcro and Allied Bendix have moved into the Douglas-Agua Prieta area to set up maquiladoras, also known as “twin plants.” An electronics firm, Hutronix, recently moved into a bigger plant in Douglas.

A state prison also is under construction eight miles north of town, on the site of the old Bisbee-Douglas International Airport. Some Phelps Dodge workers may be able to find jobs there, but they would start at about half the $30,000 they used to make, Kincaid said.

City officials also see hope that the smelter’s closing could turn Douglas into a haven for retirees. Without the smelter, they said, Douglas will have cleaner air than Phoenix and Tucson, and it has a milder year-round climate.

After Jan. 15, “we’re going to toot our horn as loudly as we can and say we’ve got the cleanest air in the state,” Kincaid said.