Alcoa cutting workforce

PITTSBURGH — Alcoa Inc., the world's third-largest aluminum maker and operator of a large smelter near Goose Creek, S.C., said Tuesday it will cut 13,500 jobs, or 13 percent of its global work force, and slash spending and output to cope with the global economic slowdown.

The company also said 1,700 contractors will be cut as part of a broad-based plan to reduce costs that includes the sale of four business units and a global salary and hiring freeze.

Alcoa also said it will further limit smelting by more than 135,000 metric tons per year, lowering total aluminum output by more than 750,000 metric tons, or 18 percent, annually.

The reductions expand on cost-cutting measures announced in October, when Alcoa reported a 52 percent decline in third quarter profits, largely a result of sharply lower aluminum prices, weaker demand and a charge from curtailing a smelter in Texas.

Kevin Lowery, the company's director of corporate communications, said the layoffs and other cost-cutting measures announced Tuesday did not specifically target the Berkeley County plant in South Carolina, where Alcoa has about 600 workers and makes high-grade aluminum ingots.

"The production cuts were in Tennessee and not South Carolina," Lowery said.

But the broader reduction in smelting operations would be likely felt at Alcoa operations around the world, including the Mount Holly site, he said.

"This is not targeted at Mount Holly per se," he said. "I can't sit here and say Mount Holly will not be affected. Every one of our plants is trying to reduce their costs, and we will leave no stone unturned to do that. Mount Holly is not one of the items in that announcement today."

Built in 1980, Alcoa's local plant is off U.S. Highway 52, between Goose Creek and Moncks Corner. It can produce up to 245,000 tons of aluminum a year.

Alcoa said that as a result of its actions its expects total fourth-quarter charges of between $900 million and $950 million and savings of about $450 million annually, before taxes.

As part of the plan, Alcoa said it would divest its electrical and electronic systems, global foil, cast auto wheels and European transportation products businesses.

Those units, which employ 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. The company expects net proceeds from the sales of about $100 million.

The production cuts are expected to be completed by the end of March.

Shares of Alcoa fell about 4 percent in after-hours trade after rising 26 cents, or 2.2 percent, to close at $12.12 on Tuesday.

Warren Wise of The Post and Courier and Stephen Manning of the Associated Press contributed to this report.