- Aluminum producer will shut operations in Indiana and Texas
- About 1,270 jobs to be lost as company continues to cut output
Alcoa Inc., the biggest U.S. aluminum producer, will close its smelter in Indiana and reduce alumina production primarily in Texas as prices of the lightweight metal slump to a six-year low.
The closures will be complete by the end of the second quarter, New York-based Alcoa said Thursday in a statement. The company will record a charge in the fourth quarter of about $120 million, or 9 cents a share, and as much as $60 million, or 5 cents, in the current period, Alcoa said.
The actions include permanently halting operations at the 269,000-metric ton Warrick smelter in Evansville, Indiana, and shuttering the remaining 810,000 tons of alumina-refining capacity at the Point Comfort operations in Texas, Alcoa said. About 1,270 jobs will be eliminated because of the changes, Alcoa said in an e-mail.
The shutdowns are the latest such actions in 12 months, including the permanent closure of Pocos de Caldas, Alcoa’s first Brazilian unit, and the temporary curtailment of smelting capacity at the Sao Luis plant in the same country. Alcoa has rationalized its aluminum production by about a third since 2007 as the company works to become a leaner more profitable aluminum producer. At the same time, Chairman and Chief Executive Officer Klaus Kleinfeld has made investments in business segments that supply manufactured products to customers in the automotive, aerospace and energy industries.
Later this year, Alcoa plans to separate its so-called downstream segments from the mining, smelting and energy-producing units, creating two companies.
Aluminum prices have tumbled for five straight quarters as production surges while economic growth slows in China, the biggest consumer of the metal.