- Associated Press - Tuesday, November 24, 2015

ALBANY, N.Y. (AP) - Alcoa has backed off a plan to eliminate hundreds of jobs at its smelting operations in northern New York after the state agreed to a series of incentives, Gov. Andrew Cuomo told a crowd of cheering workers Tuesday.

Under the terms of the agreement, the plant will remain open for at least 3 1/2 years. The state will offer up to $30 million in electricity savings and $38 million for upgrades and improvements at the facility in Massena, near the Canadian border.

The move preserves nearly 600 jobs.

Cuomo and U.S. Sen. Charles Schumer, both Democrats, negotiated the deal after Pittsburgh-based Alcoa announced the plant’s closure earlier this month.

“We have really, really great news for you today,” Cuomo told workers who assembled for the announcement Tuesday at the plant. “The Alcoa jobs are safe and they’re going to stay right here in Massena.”

Alcoa will face up to $40 million in penalties if it violates the terms of the deal.

The company still plans to eliminate dozens of positions at the facility, according to an email sent to plant workers on Tuesday. The email, from plant Location and Smelter Manager Bob Lenney, said “significant gains” will be necessary to keep the plant competitive into 2019 because of “the incredibly challenging aluminum market.”

“Even with this generous support from the state, regretfully approximately 85 jobs will be affected,” Lenney wrote.

Aluminum prices have plunged in recent months as economic growth in China and elsewhere has slowed, putting pressure on commodities producers like Alcoa to cut costs.

Schumer said state leaders will return to the negotiating table in three years to ensure the plant’s continued operations if necessary - though he said market forces could make it moot.

“If the price of aluminum is up, which we hope it will be, it will take care of itself,” he said. “If the price of aluminum is down, we’ll be back here.”

Earlier this month, Cuomo and Schumer announced a deal with Kraft-Heinz to keep three upstate plants open, a move that will save nearly 1,000 jobs.

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