About 200 former workers at Goldendale Aluminum Co. who expected their employee stock ownership plan, or ESOP, to provide a cushion for retirement, say they're left instead with a pittance Ñ and a closed smelter that isn't expected to reopen.
The Goldendale, Wash., plant was one of three aluminum smelters still operating in the Northwest before it shut down last week. It's part of Portlander Brett Wilcox's holding company, Golden Northwest Aluminum.
When wholesale power rates soared to record highs two years ago, Golden Northwest curtailed operations at the Goldendale smelter and at its Northwest Aluminum Co. smelter in The Dalles. In exchange, Wilcox received $285 million from the Bonneville Power Administration, which resold Golden Northwest's electricity allocation.
A federal class-action lawsuit currently making its way through the court system contends that Wilcox should have treated the money from electricity sales as revenues subject to profit-sharing, thus making it available to employees.
With $40 million of the BPA check, Wilcox could have liquidated ESOP shares at $225 per share, said Steve Johnston, a former Goldendale Aluminum employee who is the lead plaintiff in the suit.
'He told us over five years ago how he was going to do just that,' Johnston said, contending that Wilcox instead borrowed from the money 'and devalued (the shares) to almost nothing.'
Johnston worked at the smelter for 15 years, until he was laid off in November 2001. The current value of his stock, he said, is 'about $4,000, or $2.50 a share; when I started out it was roughly $100,000.'
Some employees say the value of their stock has dropped from about $200,000 to $6,000, and others from $180,000 to about $5,500.
When Seattle law firm Hagens Berman LLP filed the lawsuit in U.S. District Court in Spokane in January 2002, an official for the United Steelworkers of America defended Wilcox, saying that the union supported the company and charging that the profit-sharing lawsuit was an attempt to liquidate the company.
David Foster, director of the union's District 11, said an agreement between the union and Golden Northwest committed the company to making $100 million in energy investments and contained provisions protecting union members if income from the energy projects was used for any other purpose than to smelt aluminum.