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Alcoa Intends to Cut 6,500 Positions,
Take Charge of Up to $250 Million

The Wall Street Journal, Friday, November 19, 2001

PITTSBURGH -- Alcoa Inc., struggling with lower aluminum prices and weaker demand for aerospace and construction products, plans to cut 6,500 jobs, or 4.6% of its work force.

The move, affecting employees in about 40 of the company's 500 facilities, will result in an a charge of $200 million to $250 million in the fourth quarter, Alcoa said Monday.

Alcoa, the world's biggest producer of primary aluminum, fabricated aluminum and alumina, will make about 1,100 of the 6,500 planned job cuts in Europe, a spokesman said. The remaining 5,400 planned job cuts will primarily affect workers in the Americas."

As a result of these decisions, Alcoa will emerge stronger, more competitive and better aligned to meet the needs of our customers," Alain Belda, Alcoa's chairman and chief executive, said Monday in a prepared statement.

The company posted a 7.9% drop in third-quarter profit, and said it didn't expect conditions to improve until sometime next year. Sales fell 13% in the quarter.

Although aluminum began the year on a bullish note, with high prices and relatively tight inventory, the metal is wallowing amid a price slump because of sharply increased production in Eastern Europe and a drop-off in world-wide demand. Aluminum prices on the London Metals Exchange, a key indicator, slid 11% in the third quarter from a year earlier.

Alcoa said Monday that the restructuring is designed to streamline operations after a series of acquisitions. It expects to complete the measures by the end of next year.

"These actions will enable Alcoa to more efficiently serve customers in the building and construction, automotive, aerospace, commercial transportation, industrial products and packaging markets," the company said.

Alcoa is close to a deal to acquire WMC Ltd., an Australian mining company, for as much as $6 billion in cash and stock. Alcoa also recently announced a joint venture partnership with Aluminum Corp. of China, that country's largest aluminum maker. As part of that deal, Alcoa plans to buy an 8% share in the Chinese company.

Alcoa has 140,000 employees in 38 countries.

Alcoa Intends to Cut 6,500 Positions, Take Charge of Up to $250 Million
The Wall Street Journal, November 19, 2001

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