Will Kentucky-Backed Aluminum Plant Flourish? Analyst Says ‘Not Unreasonable’
The CEO of an aluminum mill slated to open in eastern Kentucky claims the company will be able to sell aluminum for 50 percent cheaper than its competitors, allowing it to pay workers $65,000-per-year starting salaries.
This spring, Braidy is scheduled to break ground on the $1.3 billion plant, which will be located in an industrial park that straddles Greenup, Boyd and Carter Counties.
Braidy CEO Craig Bouchard said the company would open the facility in 2020 and employ 600 workers from the region. Future employees can qualify by getting a Braidy-tailored aluminum rolling associate’s degree from Ashland Community and Technical College.
Jorge Vazquez, director of Harbor Aluminum Intelligence, said the company has an “interesting business case” given the auto industry’s increased use of aluminum, Braidy’s location and a new “right-to-work” law approved by the state legislature.
“I think they have a case. I think it makes sense. I think that asserting that they’re going to produce at a much lower cost is not crazy,” Vazquez said.
Vazquez said the company will be the first to build an aluminum mill in the U.S. since 1985 — just as automakers indicate they’re going to use more aluminum in vehicles over the next decade.
“The use of aluminum sheet in transportation is growing in such a way that every year the market requires 20 percent more auto sheet in order to satisfy demand,” Vazquez said.
Braidy CEO Bouchard says Gov. Matt Bevin and the Republican-led legislature were instrumental in wooing the company to Kentucky. He has praised the state’s passage of a right-to-work law, which bans companies from requiring workers to pay union dues to keep their jobs — even if workers have voted to unionize the company.
Vazquez said not having to deal with a union will give Braidy an advantage over some of its competitors.
“If you have good times, you share those with your employees. If you don’t have good times, you share those with your employees,” Vazquez said. “You don’t carry the huge legacy costs that the other mills carry.”
The state also agreed to invest $15 million in Braidy stock and promised a combination of tax incentives that total more than $10 million.
Vazquez said the state’s investment isn’t massive, but it signifies that the state’s interests will align with Braidy’s.
“If you have the state of Kentucky as your shareholder, how long is it going to take the Kentucky government to give them permits?” Vazquez said.
Bouchard said the state’s investment amounted to “skin in the game” after an event in Louisville last week. “Because then you’re all in the same boat, you’re rowing together,” Bouchard said.