Many idled Kaiser Aluminum & Chemical Corp. Steelworkers can receive one more year of curtailment pay before the company is obligated to begin paying them early-retirement benefits in the event they arent back to work, and while many Steelworkers are looking forward to that day, a union representative says he thinks Kaiser would restart its smelters at a loss rather than make those retirement payments.


Dan Russell, president of the United Steelworkers union Local 329 here, says the union estimates that the companys obligations under the early-retirement program could total $100 million over time.


Kaiser isnt releasing the amount it would have to pay, but says in its third-quarter earnings statement filed with the U.S. Securities and Exchange Commission that, Such costs could be significant and would adversely impact the companys operating results and liquidity.


In all likelihood, Kaiser would restart its idled Mead and Tacoma smelters rather than make the early-retirement payments, even if aluminum prices fail to rebound from their current low levels, Russell predicts.


Those are the kind of costs that, given what theyve been through I dont think they can stand it, he says.


Scott Lamb, Kaisers spokesman in Houston, says, We think its somewhat premature to begin speculating in detail about that since a lot can happen between now and then. He adds, however, that even if Kaiser did elect to pay early-retirement benefits, they would be paid over a number of years. It would not be an immediate cash impact to the company.


Under its contract with the Steelworkers, Kaiser must pay its most senior union members about 70 percent of their base wage while the plants are idled. Theres a two-year cap on those payments, however, and many workers already have been receiving the so-called sub-pay for a year, Lamb says.


After thatproviding the plants stay closedsome 345 Steelworkers of the more than 600 who are idled at Mead would become eligible for early-retirement benefits, which amount to the workers pension plus a $400-a-month supplement until age 62, Russell says.


Kaiser idled its Mead and Tacoma smelters a year ago because it could resell its power allotment from the Bonneville Power Administration for more money than it could make producing aluminum. Under its new BPA contract, which took effect in October, Kaiser no longer can benefit from such power sales.


In recent months, Kaiser has said it would consider restarting one or both of its smelters even under less-than-ideal conditions to boost cash flow and reduce or eliminate the curtailment payments its been making to Steelworkers.


Russell says another consideration makes that option even more likely: Starting next October, Kaiser will have to pay the BPA a penalty for not using power the aluminum company has contracted for from the big federal power-marketing agency.


That makes October 2002 a logical time to restart one or both plants if economic conditions dont make that possible earlier, Russell says.


Theres just a lot of things that are going on that dictate Kaisers next move, he says.


Kaiser has other options, of course, such as permanently closing or selling the smelters.


Russell says a sale of Kaisers Trentwood rolling mill here has been rumored for more than a year, and some of those rumors have had the Mead and Trentwood facilities being sold as a package.


None of the rumors, however, has amounted to anything, he says.


As for simply closing the smelters, Lamb, of Kaiser, says that such a move is not even on the radar screen. We have a long-term view of our presence in the Northwest. We value those assets.