Geopolitics, a global recession, the rise of the east and multi-nationalism have combined to create a smaller, less U.S.-centric world.

The recession will end—honestly it will. But then what? There's no doubt that the downturn has been taxing for the North American aluminum industry, which has had to confront the stark reality of production curtailments, plant closures, mass layoffs and bankruptcies.

The short-term reactions — no matter how traumatic — are only part of the story, however. The recession also will bring about important fundamental paradigm shifts that will reshape how business is done in the future.

Certainly, the aluminum industry that existed before summer 2008 no longer exists and possibly may never return. While this new world order can cast a gloomy specter, it also creates new opportunities for future growth and market repositioning.

New norm #1: Globalization is a given. Demand destruction is a fait de complis.

'We sat on our laurels and held the hard-headed view that the U.S. marketplace was isolated. That turned out to be a huge mistake.'

— U.S. aluminum extruder

The U.S. downstream aluminum industry will be smaller than it was before the recession hit. "There's a combination of factors," one analyst said, "but the two biggest are demand destruction due to smaller end market production — especially in the automotive sector — and production moving to low-cost areas overseas."

Take, for example, the extrusion industry, where shipments of aluminum extruded products by U.S. and Canadian producers totaled 928.2 million pounds in the first five months of 2009, off 37.4 percent from the same period last year, according to data from the Aluminum Association, Arlington, Va. The recession has hit the extrusion industry particularly hard, given that nearly half the extrusions made in North America go into the automotive and construction sectors.

John Tumazos, an analyst at Very Independent Research LLC, told AMM that extruders likely will have only about two thirds of the business they had before the industry's downturn.

The stronger extruders, like Kaiser Aluminum Corp. and Norsk Hydro ASA, have scaled back production, while some of the more exposed players, such as Indalex Inc. and Signature Aluminum US, were forced into bankruptcy.

Aluminum products company Sapa Group, which...