Bloomberg News

Alcoa Plans to Expand Tennessee Plant to Meet Automotive Demand

May 02, 2013

Alcoa Inc. (AA:US), 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 will spend $275 million in the next three years at its rolling mill in Alcoa, Tennessee, the New York-based company said today in a statement.

Alcoa announced in September 2011 it would spend $300 million to expand 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. Yesterday, 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. General Motors Co. (GM:US) 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.

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, Virginia.

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.

To contact the reporters on this story: Sonja Elmquist in New York at selmquist1@bloomberg.net; Craig Trudell in Southfield, Michigan at ctrudell1@bloomberg.net

To contact the editor responsible for this story: Simon Casey at scasey4@bloomberg.net


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Companies Mentioned

  • AA
    (Alcoa Inc)
    • $16.98 USD
    • 0.42
    • 2.47%
  • GM
    (General Motors Co)
    • $34.91 USD
    • -0.15
    • -0.44%
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