Industry Speaks Out on Alcoa's Announcement
to Acquire Traco
June 30, 2010
Perhaps another example that construction industry companies are
continuing to struggle, Alcoa, Kawneer's parent company, announced
on Monday it was acquiring Traco (CLICK
HERE for related article). Some say the announcement was not
unexpected and we can certainly expect to see more similar acquisitions
before the economy returns to a more prosperous state; others say
they how are not sure how this news will impact the industry or
what's left to come.
One industry source who asked to remain anonymous told USGNN.com
that the announcement by Alcoa that it was acquiring Traco did not
come as a big surprise. "Traco, like many other companies,
has been struggling in the current economy. I suspect we will continue
to see greater consolidation at all levels of our industry--window
fabricators, glass fabricators, glazing contractors, etc. There
is simply not enough business to support all of the current capacity
in the various markets," said the source. "With price
and margin declines hitting everyone it will be simply a matter
of time before we see either more acquisitions or business closures
as a result of this economy. This is very similar to past cycles."
Burgess Snyder Industries in Virginia Beach, Va., is one contractor
that has worked with Traco for a number of years. Tom Johnson, the
glazing contractor's executive vice president, says he is unsure
of what the transaction, once completed, will bring.
"We've had a great relationship with Traco for a long time,"
said Johnson, explaining that they still do not yet know enough
to say how it will affect business for them.
"I do see that there can be a lot of benefits from the synergies
between Traco and Alcoca/Kawneer, but as far as [what will happen
next] we will have to wait and see."
Over the past two years Alcoa and Traco have both seen their share
of challenges resulting from the slow construction market. In January
2009 Alcoa announced plans "to conserve cash, reduce costs
and strengthen its competitiveness during the current economic downturn."
This included reducing employees by 13,500 as well as instituting
a global salary and hiring freeze (CLICK
HERE for related article).
Likewise, in March of last year Traco closed its manufacturing
plant in Bainbridge, Ga., affecting about 70 employees (CLICK
HERE for related article). Later that year it closed its Johnson
City, Tenn., location, impacting about 180 jobs (CLICK
HERE to read a related article.)
Stay tuned to USGNN.com for news on this matter as it's made available.
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