Alcoa Reaches Agreement with New York State to Increase Competitiveness of Massena West Smelter
Lightweight metals leader Alcoa (NYSE:AA) today announced that it has entered into a three-and-a-half year agreement with New York State to increase the competitiveness of the Massena West smelter. The Company had previously announced plans to curtail the facility amid prevailing market conditions. The agreement will help maintain hundreds of jobs in New York’s North Country, improve the cost position of the smelter and support growth projects for the casthouse.
“Senator Schumer and Governor Cuomo have been tremendous allies for Alcoa’s Massena operations for many years and we thank them for their continued support,” said Chairman and Chief Executive Officer Klaus Kleinfeld. “Today’s agreement helps better position the smelter in light of prevailing market conditions, providing this facility a bridge to a stronger commodity market and maintaining jobs in the North Country. We remain focused on ensuring our Upstream business is well-positioned to succeed throughout the cycle.”
New York State’s incentive package will help maintain approximately 600 jobs at the Massena West facility through the term of the agreement. The plant has 130,000 metric tons of smelting capacity.
With the Midwest transaction aluminum price down 30 percent year-to-date, Alcoa will continue with its other previously announced curtailments of uncompetitive smelting and refining capacity. Once the curtailments are complete, Alcoa’s smelting capacity will be reduced by 373,000 metric tons. The reductions will further improve the cost position of the Upstream business and ensure competitiveness in a lower pricing environment.
Alcoa has been aggressively reshaping its Upstream portfolio as part of a successful multi-year strategy to position itself as a low-cost global leader in alumina and aluminum production. The Company is on track to meet its 38th percentile target on the global aluminum cash cost curve in 2016.
Revised total restructuring-related charges in the fourth quarter of 2015 associated with actions announced in November will be between $130 million and $150 million after-tax, or $0.10 to $0.11 per share, of which approximately 40 percent would be non-cash.
About Alcoa
A global leader in lightweight metals technology, engineering and manufacturing, Alcoa innovates multi-material solutions that advance our world. Our technologies enhance transportation, from automotive and commercial transport to air and space travel, and improve industrial and consumer electronics products. We enable smart buildings, sustainable food and beverage packaging, high performance defense vehicles across air, land and sea, deeper oil and gas drilling and more efficient power generation. We pioneered the aluminum industry over 125 years ago, and today, our more than 60,000 people in 30 countries deliver value-add products made of titanium, nickel and aluminum, and produce best-in-class bauxite, alumina and primary aluminum products. For more information, visit www.alcoa.com, follow @Alcoa on Twitter at www.twitter.com/Alcoa and follow us on Facebook at www.facebook.com/Alcoa.
Forward-Looking Statements
This release contains statements that relate to future events and expectations and as such constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include those containing such words as “estimates,” “expects,” “goal,” “plans,” “should,” “target,” “will,” “would,” or other words of similar meaning. All statements that reflect Alcoa’s expectations, assumptions or projections about the future, other than statements of historical fact, are forward-looking statements, including, without limitation, statements regarding Alcoa’s goal to create a globally competitive Upstream business and the expected financial impact of the curtailments. Forward-looking statements are subject to risks, uncertainties and other factors, and are not guarantees of future performance. Important factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements include: (a) material adverse changes in aluminum industry conditions, including global supply and demand conditions and fluctuations in London Metal Exchange-based prices and premiums, as applicable, for primary aluminum, alumina, and other products, and fluctuations in indexed-based and spot prices for alumina; (b) Alcoa’s inability to successfully realize goals established in each of its business segments, at the levels or by the dates targeted for such goals (including moving its alumina refining and aluminum smelting businesses down on the industry cost curves and increasing revenues and improving margins in its Global Rolled Products, Engineered Products and Solutions, and Transportation and Construction Solutions segments); (c) Alcoa’s inability to realize expected benefits, in each case as planned and by targeted completion dates, from acquisitions, divestitures, facility closures, curtailments, or expansions, or international joint ventures; (d) political, economic, and regulatory risks in the countries in which Alcoa operates, including unfavorable changes in laws and governmental policies, tax rates, civil unrest, or other events beyond Alcoa’s control; (e) changes in preliminary accounting estimates due to the significant judgments and assumptions required; (f) the outcome of contingencies, including legal proceedings and environmental remediation; and (g) the other risk factors summarized in Alcoa’s Form 10-K for the year ended December 31, 2014, and other reports filed with the Securities and Exchange Commission. Alcoa disclaims any obligation to update publicly any forward-looking statements, whether in response to new information, future events or otherwise, except as required by applicable law.
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