Alcoa shutdowns a blow to surrounding small businesses

The closure of Alcoa operations in Victoria and NSW with job losses for around 1000 staff could have a devastating flow-on effect for local small businesses.

The New York-headquartered aluminium company employs around 500 people at its Point Henry smelter in Geelong, Victoria, and around 480 people at two rolling mills in Yennora, NSW, with these operations all set to cease in August.

Alcoa chairman and chief executive Klaus Kleinfeld said in a statement the assets are “no longer competitive and are not financially sustainable today or into the future”.

Australian Workers Union state secretary Ben Davis said the closure would not only cost jobs within Alcoa, but a further 2000 to 3000 jobs among local suppliers and contractors around Point Henry, and put the Geelong economy into recession, The Australian reports.

Opposition Leader Bill Shorten reportedly said the impact on Geelong would be similar to an “industrial asteroid”.

Council of Small Business of Australia executive director Peter Strong told SmartCompany he agreed the economy of the surrounding areas would be hit hard.

“But this is not just small businesses, it is the community, the independent contractors, the doctors, the lawyers, the retailers, the health professionals in the area,” he says.

He says COSBOA’s view is that more studies need to be done into regional areas and micro-cities on urban fringes into the impact of the closure of big companies.

“I spoke to a small business owner recently…he said the only global economy I am interested in is the one that is within five kilometres of my shop,” he says.

“That sums it up.”

Strong thinks with the Alcoa closures scheduled for August, action needs to happen immediately in each community to work out what impact the closures will have. He wants to see more government resources invested into helping to advise the communities and to assist with retraining.

Victorian Employers’ Chamber of Commerce and Industry chief executive Mark Stone said in a statement the announcement from Alcoa was “disappointing”.

“Alcoa has made a significant contribution to the Victorian economy, especially in the Geelong region, for many years”, he said.

“We welcome Alcoa’s commitment to helping its employees transition and urge governments at all levels to work with Alcoa and its contractors, suppliers and community partners to minimise the impact of the closure of the Point Henry smelter.”

Australian Industry Group chief executive Innes Willox said the decision by Alcoa was a “major blow to the communities and individuals concerned”.

“Alcoa’s decision was clearly an extremely difficult one for a company with such a commitment to Australian industry and a further sign of the very intense pressures being faced by Australia’s traditional manufacturing industries,” Willox said.

“Critical in this context is the need to look to ways to make our traditional areas of strength more competitive and also to develop new sources of manufacturing prowess. We need a concerted effort, by business and governments, to invest in innovation, in building the business capabilities of our SMEs in manufacturing and in lifting the skills of the manufacturing workforce.”