Alcoa plans to expand Tenn. plant to meet automotive demand
(Bloomberg) -- Alcoa Inc., the largest U.S. aluminum producer, will expand a plant in Tennessee to meet increasing demand for the lightweight metal in cars and trucks.
Alcoa plans to spend $275 million in the next three years at its rolling mill in Alcoa, Tenn., the company said today in a statement. Alcoa announced in September 2011 it would spend $300 million to expand the automotive-products capacity at its Davenport, Iowa, facility.
Work there is expected to be finished this year, the company said in today's statement. Alcoa permanently closed its smelter in the eponymous Tennessee city last year as part of curtailments that reduced smelting capacity by 531,000 metric tons a year.
On Wednesday the company said in the next 15 months it will evaluate making a further 460,000 tons of reductions. Automakers this year are on pace to sell the most cars and light trucks in the U.S. since 2007, with deliveries rising 6.9 percent through April to 4.97 million, according to researcher Autodata Corp.
It was not clear today which customers the expanded Tennessee plant would be supplying.
General Motors Co. is targeting a 15 percent weight reduction of its vehicles through the 2016 model year, and Ford Motor Co. has set a goal to take 250 to 750 pounds (113 to 340 kilograms) from each of its models as they are refreshed.
Ford in January showed an F-150 pickup prototype at the Detroit auto show in January called the Atlas that foreshadowed its future trucks. The automaker is examining the use of more aluminum in the next-generation F-150, CEO Alan Mulally told reporters after revealing the prototype called the Atlas.
"We're going to use all of the lightweight materials," Mulally told reporters in January. "We're using more and more aluminum, so I anticipate we'll be considering more aluminum" for the new F-150. Ford makes the F-150 at its Kansas City assembly plant, and said today it would add a third shift of 900 workers there in the third quarter.
A Ford spokesman today declined to comment when asked if Alcoa would supply aluminum for the new F-150 from the expanded Tennessee plant.
"We haven’t said anything about customers," Kevin Lowery, an Alcoa spokesman, told Automotive News today. "But we have said there is not a single (manufacturer) in North America that we are not in discussion with … or that we have not been working with. The demand for aluminum is everywhere."
The auto industry will consume 4 percent more aluminum this year as the average North American car adds 14 pounds of the metal in 2013 compared with last year, according to research by Lloyd O'Carroll, an analyst at Davenport & Co. in Richmond, Va.
Vehicle manufacturers are working to make lighter cars and trucks as regulators require automakers to reach an average fuel efficiency for their fleets of 54.5 miles per gallon (23.2 kilometers per liter) by 2025.
Philip Nussel and Andrew Thurlow of Automotive News contributed to this report.
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