Alcoa Aluminum Cutting Back
Saw this tonight in the news.
NEW YORK - Alcoa Inc., the world’s third-largest aluminum maker, said Tuesday it will cut 13,500 jobs, or 13 percent of its work force, and slash spending and output to cope with the global economic slowdown.
The Pittsburgh-based company also said 1,700 contractors will be cut as part of a broad-based plan to reduce costs that includes the planned sale of four business units and a global salary and hiring freeze.
As a result of its actions, Alcoa expects total fourth-quarter charges of between $900 million and $950 million. The company plans to report quarterly results Jan. 12. Alcoa also said the moves are expected to save the company about $450 million annually, before taxes.
“These are extraordinary times, requiring speed and decisiveness to address the current economic downturn,” Klaus Kleinfeld, Alcoa’s president and chief executive, said in a statement.
The news comes after Alcoa announced production reductions last fall. On Tuesday, it said it will further limit smelting by more than 135,000 metric tons per year, lowering total aluminum output by more than 750,000 metric tons, or 18 percent, annually.
Production of alumina, a material used to make aluminum, will be reduced to 1.5 million metric tons per year in response to market conditions, the company said.
The production cuts are expected to be completed by the end of March.
Alcoa also said it will seek to lower costs for energy and raw materials such as coke, caustic soda and aluminum fluoride.
As part of the plan, Alcoa said it would divest its electrical and electonic systems, global foil, cast auto wheels and European transportation products businesses.
Shares of Alcoa fell nearly 4 percent in after-hours trade after rising 26 cents, or 2.2 percent, to close at $12.12 on Tuesday.