Alcoa To Restructure Operations
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Alcoa Inc. will substantially restructure its operations, eliminating around 6,700 jobs and putting its soft alloy extrusion business into a joint venture to be operated by a unit of Norway’s Orkla ASA.
The restructuring will encompass plant closings and consolidations, mainly focusing on the company’s downstream businesses that make products from the basic aluminum Alcoa’s smelters produce.
The unit hardest hit by the restructuring effort will be Alcoa’s automotive wire harness and component operation, where it plans to close a plant in Portugal and restructure American and Mexican operations — resulting in elimination of more than 4,800 jobs.
Alcoa expects charges of $375 million to $425 million in the fourth quarter, partially offset by a gain of $85 million to $95 million on discontinued operations as a result of the October sale of its siding business for $305 million. The restructuring is expected to result in $125 million in annual savings.
When it reported third quarter net income of 61 cents a share, Alcoa surprised many investors who had expected bigger profits from the aluminum producer. Analysts reporting to Thomson First Call expected, on average, net income of 77 cents a share.
