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Kennecott to Suspend Utah Operations

March 26, 1985|Associated Press

SALT LAKE CITY — Kennecott, the nation's largest copper producer, announced Monday that its Utah mining and smelting operations will be suspended and 2,200 workers laid off.

The layoffs are to begin with the March 31 closing of the huge open-pit copper mine and smelter in Bingham and will be completed by September, Kennecott President G. Frank Joklik said at a news conference.

"We believe the shutdown is a temporary measure, but we cannot tell you at this stage" when the mine will reopen, he said.

Worker concessions and a rise in depressed copper prices would be needed to reverse the decision, Joklik said. Kennecott's operations in Hayden, Ariz., and Hurley, N.M., will continue, he said.

Company spokesman Ken Hockstetler said the highest copper price in recent years was $1.40 per pound in 1980--a price that since has dropped to 59 cents.

"In real dollars, it's the lowest copper price since the Depression," he said.

Kennecott reported a pretax operating loss of $160 million in 1984, compared to a loss of $91 million in 1983.

A 250-member maintenance force will be kept on at the Bingham facility, and the company will provide medical and life insurance to laid-off workers for six months, Joklik said.

The suspension followed the refusal by labor unions to accept concessions sought by the company last summer, he said. The company announced June 15 that it intended to curtail production by two-thirds because of low copper prices. Some 2,000 workers subsequently were laid off.

"The only way this could be avoided would be by negotiating with our unions some reduction in labor costs," Joklik said. "Since then (last summer) the copper prices have not improved and Kennecott's losses have mounted."

"In the first quarter of this year, our loss was estimated at $40 million (companywide) . . . which, with cumulative losses of the past, makes it impossible to sustain operations," Joklik said.

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