As politicians and power companies continue to bicker about how best to resolve California's chaotic energy problems, several local manufacturers have quietly laid off hundreds of workers. If power outages and price spikes continue, thousands of more factory workers could lose their jobs, manufacturers and analysts said.
After halting production 12 times in January due to power outages, the Miller Brewing Co. plant in Irwindale announced last week that it would begin diverting 40 percent of its production to four of its sister plants out of state.
As a result, 158 of the plant's 750 employees have been laid off, according to Victor Franco, spokesman for the Irwindale plant.
"The layoffs are indefinite or until we get some sort of resolution to the crisis," Franco said.
Miller Brewing, which typically runs its plant 24 hours a day, seven days a week, is one of many local manufacturers that signed "interruptible" contracts with Southern California Edison, under which companies agreed to forced outages during emergencies in exchange for discounted electricity rates.
Franco said that Miller Brewing originally entered the contract with the understanding that it would save the company millions of dollars in utility bills. Instead, the contract has cost the plant more than $1 million in losses and penalties this month and may end up costing hundreds of more workers their jobs.
"It's killing us," Franco said. "The outages are only supposed to last for a maximum of six hours, but what (Edison) is doing is shutting power down for five and a half hours, reinstating it for half an hour, then shutting it down again for another five or six hours."
Franco said that losses to the plant during outages average about $70,000 an hour.
The situation is equally bleak at PolyTainer Inc., a plastics manufacturing plant in Simi Valley. There, 240 of the company's 300 employees were temporarily laid off last week.
"We've lost $100,000 this month because of the outages," said Paul Strong, the company's president. "We usually operate 24 hours a day, but last week we were shut down 18 hours a day for three consecutive days.
Strong said his company will go out of business in six months if the outages continue.
Things aren't much better at Fontana-based California Steel Industries Inc., the largest steel plant on the West Coast. Lourenco Goncalves, chief executive of the company, said that power at his plant has been shut off 12 times this month, forcing him to temporarily send 1,000 workers home without pay.
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