Alcoa: News: News Releases: Alcoa Rockdale Operations Reduces Employment; Continues to Implement Company's Long-Term, Low-Cost Production Strategy

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April 23, 2003

Alcoa Rockdale Operations Reduces Employment; Continues to Implement Company's Long-Term, Low-Cost Production Strategy

ROCKDALE, Texas--(BUSINESS WIRE)--April 23, 2003--Alcoa (NYSE:AA) announced today that a joint labor-management restructuring effort will reduce operating costs at the company's Rockdale Operations, as part of its long-term, low-cost production strategy. The plant, which employs approximately 1,400, and is an integrated facility of lignite mining, power generation and aluminum smelting, will continue to operate at its full capacity of 264,000 metric tons per year of primary aluminum.

"Managers and leadership of USWA Local 4895 have worked constructively and creatively to apply the Alcoa Business System to streamline our processes," said Geoff Cromer, Rockdale Smelting and Casthouse Manager. "But we also had to take a hard look at staffing. We recognize that reductions in employment are difficult, but they help preserve employment here for hundreds of others. As a result of these actions, this facility will become more competitive within the Alcoa system and the global aluminum smelting industry."

The measures taken to improve the plant's viability are:

Application of the Alcoa Business System to all core work processes and changes to job requirements to increase both production and productivity;
Implementation of processes to reduce the amount and cost of materials, goods and services purchased at the facility, and
Reduction of approximately 150 hourly and salaried jobs.

"This is a global business where we must improve productivity in order to compete," said Cromer. "Escalating costs have made Rockdale uncompetitive, and we need greater efficiencies across the board to stay in the business. We must reduce costs in every area where we can control spending."

Cromer said that the company and the United Steelworkers of America worked together to explore a range of options and, as a result, they were able to minimize the number of employees impacted by the reductions.

"The decision is a difficult but necessary one as we continue to move towards the smelter's long-term goals," Cromer said. "All of us should diligently seek new and better ways to do our jobs. This is an on-going initiative and we will always be faced with pressure to continue to reduce cost. We must change the way we work, the way we spend money and the way our costs are structured. What we are all trying to do is keep the Rockdale facility competitive."

Alcoa is the world's leading producer of primary aluminum, fabricated aluminum and alumina, and is active in all major aspects of the industry. Alcoa serves the aerospace, automotive, packaging, building and construction, commercial transportation and industrial markets, bringing design, engineering, production and other capabilities of Alcoa's businesses as a single solution to customers. In addition to aluminum products and components, Alcoa also markets consumer brands including Reynolds Wrap(R) aluminum foil, Alcoa(R) wheels, and Baco(R) household wraps. Among its other businesses are vinyl siding, closures, precision castings, and electrical distribution systems for cars and trucks. The company has 127,000 employees in 40 countries. For more information, go to www.alcoa.com

Forward Looking Statement

Certain statements in this release relate to future events and expectations and as such constitute forward-looking statements involving known and unknown risks and uncertainties that may cause actual results, performance or achievements to be different from those expressed or implied in the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include Alcoa's inability to achieve the cost-savings for the facility, power costs, economic incentives and other risk factors summarized in Alcoa's Form 10-K for the year ended December 31, 2002.