Alcoa Aluminum Cutting Back

[wheel interested]

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.

[wahoonc]

Yes they are cutting back...big time. They have suspended all capital expenditures and canceled maintenance contracts. On a side note, aluminum scrap prices have gone from over 60 cents a pound to around 16 cents a pound in the past 9 months.

Aaron

[wheel interested]

I was wondering how that might impact Airstream, if at all. I know they aren't offering the Alcoa wheels anymore, wish they did, but all the panel sheets come from them, correct? Will that impact the cost of new Airstreams or panel replacement?

[wahoonc]

Originally Posted by wheel interested

I was wondering how that might impact Airstream, if at all. I know they aren't offering the Alcoa wheels anymore, wish they did, but all the panel sheets come from them, correct? Will that impact the cost of new Airstreams or panel replacement?

Carol,
Probably won't affect Airstream. Alcoa still makes mags, but perhaps not in the sizes AS wants? Sheet goods are still being produced. If nothing else AS should be able to LOWER prices due to decreases in material costs (not that I expect that to happen) I suspect AS will take a hit due to fewer people purchasing new trailers. There is plenty of Alclad still available from various sources for replacement sheeting, at least for the older trailers, not sure what the stuff is on the newer ones. The aluminum market isn't really collapsing just the prices, so they are scaling back on production. Airstreams are a small blip in the world market for aluminum. The aircraft manufacturers, auto manufacturers and bicycle manufacturers use much, much more aluminum than Airstream ever will.

Aaron

Aaron