Alcoa said it will restructure upstream and downstream operations, which will result in the loss of approximately 6,700 jobs during the next year.
Alcoa has also signed a letter of intent with Orkla ASA’s SAPA Group for a joint venture combining its soft alloy extrusion business with SAPA’s Profiles extruded aluminum business by the end of the first quarter of 2007. The companies plan to eventually offer an IPO of the combined venture.
Alcoa’s soft alloy extrusion business has 22 facilities in eight countries, 6,400 employees and 2005 revenues of $2.1 billion. SAPA’s Profiles business has 18 facilities in 12 countries, 6,000 employees and 2005 revenues of $1.3 billion.
Alcoa will continue to operate its hard alloy extrusion business and will begin to divest three soft alloy plants that are not included in the combination with SAPA. Those plants are located in Warren, Ohio; Tifton, Ga.; and Plant City, Fla.
Of the 6,700 jobs that are expected to be cut, 320 will come from the can sheet operations; 370 from hard alloy extrusion; 4,800 from automotive and light vehicle wire harness and component operations; 470 from global packaging production; and 330 from the global primary metals and alumina operations.