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Davenport not enough for auto growth: Alcoa

Keywords: Tags  Alcoa, Klaus Kleinfeld, quarterly earnings, Davenport plant, automotive, Suzy Waite


NEW YORK — Alcoa Inc.’s $300-million automotive expansion at its Davenport, Iowa, facility won’t be enough to meet future demand from the sector, chairman and chief executive officer Klaus Kleinfeld said in a conference call with analysts following the release of the company’s first-quarter earnings results.

"I can tell you Davenport is not enough," he said. "Davenport is basically sold out even though we haven’t even built the automotive (expansion)."

Kleinfeld maintains that this is "more good news than bad news," adding that the company has options that will allow it to "do some things that we probably could not have done before."

He declined to discuss what the company’s plans are or name its customers.

"Growth prospects remain excellent" for the North American automotive industry, as new vehicle sales hit 1.54 million units in the first three months of the year, a 3.4-percent year-on-year increase, Kleinfeld said.

Aluminum usage in automobiles is forecast to double to 16 percent by 2025 as automakers continue to shift toward the lightweight metal to meet stricter fuel emissions standards coming out of Washington.

Perhaps more important than regulations is consumer behavior, Kleinfeld said, noting that 37 percent of consumers rank fuel economy as the top factor when buying a new car.

Bullish automotive forecasts encouraged Alcoa to begin the $300-million expansion at Davenport last March ( amm.com, March 5, 2012), which also involves installing new technology and equipment aimed at the company’s new 951 bonding technology, which Alcoa can license to automakers ( amm.com, April 5). 

The expansion coincided with Ford Motor Co.’s announcement that it will build future versions of its F-150 pickup with a predominantly aluminum body ( amm.com, July 27).


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