COLUMBUS, Ohio (AP) — What was once the largest private employer in its region is now Ohio's largest industrial layoff of the year.
Republican Gov. John Kasich is facing criticism over the indefinite shuttering of Ormet Corp., an aluminum smelting giant along the Ohio River and the onetime largest customer of American Electric Power. About 1,000 workers — mostly unionized steelworkers — are out of work.
State utility regulators this month rejected key portions of Ormet's proposal for dealing with hefty electric costs through accelerated power discounts from AEP and eventual on-site power production using natural gas.
Within days of the Oct. 2 decision by the Public Utilities Commission of Ohio, Ormet announced it was curtailing operations of its 272,000-ton-a-year smelter in Hannibal, along the West Virginia border south of Wheeling.
Ormet CEO Mike Tanchuk, the United Steelworkers and their allies fault Kasich — who names jobs as his highest priority — for not intervening passionately enough on the company's behalf in Ormet's case before the PUCO.
Kasich's defenders say Ormet was doomed by huge power requirements and the economic realities of the aluminum industry, not by the governor or regulators. They also question why West Virginia — home to Ormet's former headquarters and about half the laid off workers — shouldn't share political responsibility for the job losses.
The closure is a heavy blow to an economically struggling region and a county where state figures show almost a third of workers had been employed in manufacturing. In addition to 901 indefinite layoffs reported, a 2011 analysis estimated Ormet supports 2,100 additional jobs in the region with wages totaling $238 million.
Ormet filed for bankruptcy protection Feb. 25, citing historically low metal prices and "exceedingly high and uncontrollable power costs." At that time, the company had already been granted power discounts worth some $346 million.
"The PUCO has got to deal with the facts and realities that are in front of them about what the customers, the ratepayers, have already paid," said Dave Celona, an energy industry consultant who oversaw utility issues under Gov. Bob Taft.
The 5-member commission's rotating five-year terms and bipartisan makeup are designed to insulate it from gubernatorial influence. Yet expiring terms and resignations have allowed Kasich to appoint four new commissioners, including a chairman, since taking office in 2011.
Commission spokeswoman Holly Karg said independent boards carefully vetted nominees and Kasich has no sway over panel decisions. An appointee of Kasich's Democratic predecessor was among the most vocal critics in rejecting parts of Ormet's latest deal.
Karg said the panel's current chairman "very closely guards the independence of the commission."