Alcoa intends to expand its Davenport, Iowa rolled products plant to meet rising demand from the automotive market.
Automotive original equipment manufacturers (OEMs) are switching from steel to aluminum in their drive to increase the fuel efficiency, safety, durability and performance of their vehicles.
The expansion, entailing an investment of approximately $300 million, will add facilities dedicated to the automotive market to what is already the world’s foremost aerospace materials facility, containing a 220-inch wide mill, the largest in the world.
The project will create an additional 150 full time jobs in Davenport, bringing total employment to more than 2,300 high-value jobs. In addition, during construction, an incremental 150 jobs will be created at the plant. The expansion is expected to be completed by the end of 2013.
“The automotive market is a tremendous growth opportunity for Alcoa over the next several years,” said Klaus Kleinfeld, Alcoa chairman and chief executive officer. “Our leading-edge technology solutions and our world-class manufacturing capabilities, combined with our dedicated and highly-engaged workforce, put us in an enviable position in the market and bodes well for future growth.”
“Consumers want cars that are more fuel efficient and deliver the same, if not better, performance as they are accustomed to today,” said Helmut Wieser, Alcoa executive vice president and group president of Alcoa Global Rolled Products. “Practically every OEM in the world has come to us to discuss how our leading technology solutions can help them make their cars stronger, lighter and more fuel efficient.
A study of automakers by Ducker Worldwide, released earlier this month, showed automakers will increase their use of aluminum from 327 pounds in 2009 to 550 pounds in 2025. For 2012 model cars, the use of aluminum has reached an all-time high of 343 pounds per vehicle, a five percent increase. According to OEMs surveyed in the study, aluminum use as a percent of the overall automotive materials mix is expected to double by 2025 to 16 percent.
An economic development incentive package from the Iowa Department of Economic Development (IDED) helped secure the selection of Davenport for the expansion. The incentive package includes tax, financing and R&D credits as well as training grants for the Davenport workforce and new employees.
“Alcoa has been a great Iowa partner, and we are excited to see this expansion in Bettendorf,” said Iowa Governor Terry Branstad. “Their commitment to creating jobs in our state is appreciated, and coincides with my administration’s commitment to economic growth in Iowa.”
Davenport Works opened in 1948 and is one of the largest aluminum fabricating facilities in the world, generating almost $1 million a day into the local economy.
