Alcoa to Close Its Vernon Plant; 700 Jobs Are Lost : Economy: The world’s largest aluminum producer failed to win wage concessions from 440 union employees.

In another blow to the region’s manufacturing sector and economy, Aluminum Co. of America said Tuesday that it will close a 56-year-old plant in Vernon, leading to the loss of 700 jobs there.

The move came after the world’s largest aluminum producer failed to win wage concessions from 440 union employees. Alcoa said labor costs at the plant--which supplies the declining aerospace industry with aircraft skins and skeletons--are not competitive. The Pittsburgh-based company said production will be transferred to plants in Cleveland, Baltimore and Chandler, Ariz.

Alcoa is the third major aluminum processor in Southern California to close over the last two years, a result of sharp cuts in the commercial aircraft industry. Taken with Alcoa, the closings of Aluminum Forge of Santa Ana and International Light Metals of Torrance account for the loss of about 2,000 jobs.

Alcoa said the plant, which employed 1,140 in 1990, will be gradually shut down over the next two months.

The loss of the Alcoa plant is especially a blow to Vernon, which has lost 16,000 high-paying, skilled manufacturing jobs in the last decade as Alcoa scaled down and such industrial firms as Bethlehem Steel and Oscar Mayer pulled out.

“We’re very concerned . . . we had no idea this was coming,” said Vernon City Administrator Bruce Malkenhorst. He said the city is trying to come up with strategies to attract new jobs, including building a municipal gas pipeline system that would supply manufacturers more cheaply than Southern California Gas Co.

“Manufacturing in California is really taking a beating in this recession,” said Adrian Sanchez, an economist with First Interstate Bank.

Economists say the bad news is far from over. The UCLA Business Forecasting Project recently projected that aerospace employment in California will drop to 147,000 by the year 2002--down 56% from 1990--the result of defense cutbacks and weakness in the commercial aircraft business.

Alcoa said it moved to close the plant after union members--to the shock of United Auto Workers leadership--voted against discussing concessions with the company. Bruce Lee, UAW regional director, said he urged several hundred Alcoa union employees attending a meeting Saturday to at least hear Alcoa out, especially given Southern California’s shaky economy.

“I told them I don’t like to operate in the dark and that there is no risk in at least finding out what Alcoa wants. If they want $10 an hour, and we don’t like it, then we can reject it,” Lee said.

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Lee said that every union member who spoke at the three-hour meeting opposed talks with Alcoa, even though the company had made it clear the plant would close.

“Their (union members) position was that they had made enough sacrifices over the years and that they had gone as far as they were going,” Lee said.

UAW negotiator Ned Scott said that over the last several years, union employees had forgone wage increases and had accepted less vacation, with the maximum reduced to four weeks from 10. Hourly wages at the plant ranged from $8 to $15, according to the UAW. Alcoa said average hourly compensation for each employee--a figure that includes the value of health insurance and other benefits--was $23.

Union officials estimated that from 30% to 40% its members at the plant are eligible for retirement.

Alcoa declined to say how much money it wanted to save through concessions at the plant, a major supplier to Boeing.

Alcoa’s action also comes amid a worldwide slump in aluminum manufacturing, triggered by a sharp boost in exports from the former Soviet Union. Alcoa cut production by 25% last fall and another 10% in February in an attempt to help stabilize the market.

Alcoa said it will take a $50-million first-quarter charge for the cost of closing the plant, an amount expected to wipe out any earnings in the quarter for the company.