Global Fastener News

Fastener Segment Sales Slow At Alcoa

Jason Sandefur

Alcoa reported sales at its Engineered Products and Solutions segment, including Alcoa Fastening Systems, rose 6% to $5.6 billion during 2008, while after-tax operating income climbed 22% to $503 million.

Engineered Products segment sales dropped 4% to $1.26 billion during the fourth quarter of 2008, while Q4 income slipped to $65 million, down 15% compared with the final quarter of 2007, and 51% lower than the third quarter of 2008.

Overall Alcoa sales declined 8% to $26.9 billion, while the company reported a $74 million loss for 2008, compared to a $2.56 billion profit the previous year.

The report comes amid news that Alcoa is scrambling to slash spending and reduce output by cut 13,500 jobs — about 13% of its workforce. It’s unclear how many of those jobs would be lost at AFS, a primary supplier to the Boeing 787 Dreamliner project.

However, AFS was not among the four business units Alcoa intends to divest: electrical and electronic systems, global foil, cast auto wheels and European transportation products businesses.

Those units, which employ a total of 22,600 people at 38 locations, had combined 2008 revenues of $1.8 billion, with an estimated after-tax operating loss of about $105 million, according to Alcoa. Net proceeds are expected to reach $100 million.

Alcoa also imposed a global salary and hiring freeze to combat a deepening global recession.

Likewise, it lowered total aluminum output by more than 750,000 metric tons, or 18%. Alcoa ultimately expects savings of about $450 million annually.

The company said capital expenditures will drop 50% to $1.8 billion in 2009. Web: alcoa.com �2009 FastenerNews.com