The Value-Add Company will include global rolled products, engineered products and solutions, and transportation and construction solutions businesses.
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But now the company says big changes are on the way.
“I don’t know if it’s really bad news”.
“I think it’s probably a good thing”. Analyst Michael Gambardella said that the division would not bring about any savings or synergies for the upstream business, while overhead costs at the segment could increase substantially. “They have a contract”. But Massena’s operation has remained open.
Nevertheless, the multinational reduced upstream operations and focused on midstream and downstream business initiatives. “Those are all good things”, he said. To improve productivity in its upstream business, Alcoa is going through a review of 500,000 metric tons of smelting capacity, and 2.8 million tons of alumina capacity, with possible closures. The company would be broken down into an upstream and a value-add company. It will have a workforce of a few 17,000. The second company will span 157 sites and have about 43,000 employees. Alcoa’s core business of smelting had taken a hit due to the oversupply of aluminum in the market and fast sinking prices.
“We really don’t have a lot of knowledge about the whole situation yet”, he said.
Alcoa Inc (NYSE:AA) imminent split into two companies all but confirms the impact of the downturn in the industry.
Reports state that Kleinfield will lead Alcoa, after the separation, as chairman and CEO, though no one has yet to be named CEO of the unnamed, second business and, according to Reuters, Alcoa has provided no current timeline for choosing someone to head the new company.
U.S. Sen. Charles E. Schumer’s office said he would be monitoring the situation. As a result, Alcoa has dropped eight points on the global aluminum cost curve since 2010 to the 43rdpercentile, and is targeting the 38th percentile by 2016.
“I don’t know how to react”.
“I’m hopeful the new corporate structure will be a good thing for Massena operations”, said Gray. “I’m hoping for the best”.
Another plant, Massena East, has been shuttered pending announcement of whether Alcoa intends to modernize it.
“I don’t know. It’s too soon”, he said.
“We’ve been building these two value engines – shaping, molding, adding, brushing up, and putting them in good form”, Kleinfeld told The New York Times.
An analyst at Sterne Agee CRT, Josh Sullivan stated the company had already been in the transition process that includes its recent takeover of RTI worldwide Metals.
In mid-September Alcoa announced a deal with Ford Motor Co to provide components for the 2016 model F-150 pickup, the best-selling USA vehicle since 1982, using Micromill.
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This raises the possibility that the local operation that the town of Alcoa is named after could end up being called something besides Alcoa.
