Alcoa unveils $300 million plant expansion

Alcoa unveiled a $300 million expansion at its Riverdale, Iowa, plant to meet increased demand for aluminum from the automotive industry.

Crews at the expanded Davenport Works facility will produce aluminum sheet products for the auto industry. Wednesday, Manufacturing Director Rob Woodall said aluminum’s durability, strength, and light weight is making it a popular choice for automakers looking to increase fuel economy.

“Recently, Ford announced that it’s going to put more aluminum on it’s F-150 truck. That could save 700 pounds on a full-size pick-up, and it equates to a lot of gas mileage. It’s something consumers want, and it’s something [automakers] need to do from a regulation standpoint,” said Woodall.

Demand for aluminum to produce vehicles is expected to nearly double by 2025, and the amount of aluminum body sheet content in North American vehicles alone is expected to quadruple by next year.

With its $300 million expansion, leaders believe Alcoa is ready to take advantage of that skyrocketing demand.

“Automotive has been about 15 percent of our business, now it’s growing to about 40 percent,” said Woodall.

Production workers also joined the celebrations Wednesday afternoon. Michael Abbott has worked with Alcoa for 14 years and said he’s thankful for the expansion.

“To learn the new equipment, the new technology… just to be able to have that opportunity,” said Abbott.

The expansion also creates 150 new, full-time jobs, and it helped the plant retain an additional 200 current, full-time positions. Alcoa will be hiring throughout the year for more of these jobs, which include electricians, general mechanics, and highly-skilled manufacturing positions.

“These are really quality, good jobs — the kind that we want. We’re starting to see a revitalization of the manufacturing,” said Iowa Gov. Terry Branstad after he helped cut the ribbon on the facility.

The completion of nearly two years of construction also represents the biggest investment Alcoa has made in the Quad Cities in nearly two decades.

“It’s a huge day,” said Woodall.

1 Comment

  • Gary Reber (@GaryReberFEJ)

    While during the past decade, the worldwide aluminum market has tumbled and created a stockpile of inventory, demand for aluminum to produce vehicles is expected to nearly double by 2025, and the amount of aluminum body sheet content in North American vehicles alone is expected to quadruple by next year.

    With Alcoa’s $300 million expansion, leaders believe Alcoa is ready to take advantage of that skyrocketing demand. But as usual, the same wealthy ownership class will further concentrate their share holdings sans employee ownership.

    Alcoa cut 17,655 jobs since the Great Recession began. Even with the quadrupling of demand for aluminum to manufacturer vehicles, due to investment in sophisticated tools, machines, and super-automation operated by computers, these jobs are not coming back. This is the consequence of tectonic shifts in the technologies of production that destroy jobs and devalue the worth of labor, not only nationally but on a global scale. Even with demand expected to quadruple by next year, Alcoa will not re-hire the vast majority of the workers it has laid-off.

    Alcoa is a company that relies on physical capital as the main input factor in the production of aluminum, with decreasingly less human labor necessary to produce aluminum at competitive prices on the world market.

    While Alcoa has severely curtailed non-critical investment in recent years (capital expenditures in 2009 were projected to be down $1.9 billion, a 50 percent decrease from 2008), the company now intends to expand capital investment by $300 million this year.

    Sadly, the employees who get to remained employed will be limited to the income and benefits their jobs provide, and not participate in the FUTURE ownership of the expansion of new productive capital. While long-term Alcoa employee Michael Abbott says he is thankful “to learn the new equipment, the new technology…just to be able to have that opportunity, as is the case generally, employees will only self-sustain their enthusiasm for their work a limited amount of time. After that, in the absence of feeling appreciated by ownership and management employees adopt the “whatever” attitude.

    The main issue that the residents of the Davenport community need to wrestle with is whether the community will acknowledge their servant position and choose a path that empowers them to become employee-owners of the expanded investments in the new capital plant assets.

    This is where an Employee Stock Ownership Plan (ESOP) should be created to empower the employees to own and pay for their stock acquisition out of the future earnings of the investments, repayable in pre-tax dollars. For information on the ESOP financial mechanism see http://cesj.org/homestead/creditvehicles/cha-esop.htm.

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