More Firings at Alcoa

This time 6,700 heads will roll.
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Alcoa

(AA) - Get Report

said it would slash 6,700 jobs in its latest restructuring effort.

The aluminum giant said late Tuesday it will form a soft alloy extrusion joint venture with Orkla ASA's Sapa Group. The companies plan to eventually spin the venture off in an initial public offering. Three Alcoa plants not involved in the venture -- in Warren, Ohio, Tifton, Ga., and Plant City, Fla. -- will be shut down.

Alcoa will continue to operate its hard alloy extrusion business which serves the aerospace, automotive and selected other markets.

"After reviewing a number of options, we have decided the best course to further strengthen our downstream operations and maximize shareowner returns is to combine the soft alloy operations of these two businesses," said CEO Alain Belda. "The combination of these two operations provides many opportunities to improve profitability by leveraging the scale of a broader global manufacturing system."

This firings are expected to save $125 million before taxes on an annualized basis.

"Through the first three quarters of 2006, we have generated more earnings than in any full year in our company's history, and in order to continue to move forward, we now need to take the difficult but necessary restructuring steps that will continue to maximize profitability across the company," said Belda.

Alcoa previously set plans for 6,500 layoffs in the second quarter of 2005 and 8,000 in 2003.

Shares rose 65 cents late Tuesday ahead of the news to $29.12.