Parent Company Announces "Decisive Actions" to Address
Alcoa, parent company of Kawneer Inc., announced yesterday its
action plans to conserve cash, reduce costs and strengthen its competitiveness
during the current economic downturn.
Kawneer is part of Alcoa's building and construction systems business
unit, where there will be "consolidation of operations."
Kevin Lowery, Alcoa's director of corporate affairs, told USGNN.com
that "all businesses within this realm are looking to maximize
operating efficiencies." This is expected to help align capacities
with the decline in commercial building and construction.
"That's what this unit is working on as we speak," says
Other specific action plans for Alcoa include:
- Smelting reductions of more than 135,000 metric tons per year
(mtpy). This is expected to result in a reduction of total primary
aluminum output by more than 750,000 mtpy, or 18 percent of annualized
output. The company will also reduce alumina production accordingly
across the global refining system to a total of 1.5 million mtpy.
Curtailments will be fully implemented by the end of the first
- Reducing the number of employees by 13,500 or 13 percent of
the company's worldwide workforce by the end of 2009. An additional
1,700 contractor positions also will be eliminated. Alcoa has
also instituted a global salary and hiring freeze.
- Selling four non-core businesses: Electrical and Electronic
Systems; Global Foil; Cast Auto Wheels; and Transportation Products
- Reducing 2009 capital expenditures by 50 percent.
According to Alcoa's statement, total charges for the 4th quarter
of 2008 due to restructuring, impairment and other special charges
are expected to be between $900 and $950 million after tax, or $1.13
to $1.19 per share, of which approximately 80 percent is non-cash.
The restructuring and divestiture program is expected to save approximately
$450 million before taxes on an annualized basis.
HERE to read the full Alcoa press release.
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