Alcoa to close Tennessee smelter, make other cuts
NEW YORK—Alcoa Inc. said Thursday that it plans to close an aluminum smelter in Tennessee and some operations at a Texas facility to cut costs in the face of weak prices.
The moves, plus others to come, will reduce Alcoa's global smelting capacity by about 12 percent.
Aluminum prices have fallen by about one-fourth since April because of factors such as weak demand in construction, slower growth in China and uncertainty about the direction of Europe's economy. Meanwhile, Alcoa has faced higher energy and raw-material costs.
New York-based Alcoa said it will take restructuring charges of $155 million to $165 million in the fourth quarter, mostly related to the cutbacks. It is scheduled to release financial results Monday.
The company said that it would permanently close a smelter in Alcoa, Tenn., idled in 2009, and shut down two of the six idle production lines at a smelter in Rockdale, Texas. It expects to complete the moves in the first half of this year and announce other reductions soon.
In 2009, the Tennessee and Texas smelters employed more 1,100 people combined. Alcoa still has about 1,000 workers at the Tennessee complex and 70 in Texas, working in other facilities, a spokesman said.
"These are difficult but necessary steps to improve Alcoa's competitiveness, preserve and grow shareholder value and protect jobs in the rest of the Alcoa system," said Chairman and CEO Klaus Kleinfeld.
Alcoa shares fell 9 cents to close at $9.36. In extended trading, they were down another 15 cents, at $9.21.