August 25, 2004

Alcoa to Re-Start Idle Capacity at Massena, NY Smelters; Modernization Key To Massena's Viability; Long-Term Power Contract Needed

PITTSBURGH--(BUSINESS WIRE)--Aug. 25, 2004--Alcoa (NYSE:AA) today announced it plans to re-start the partial production it idled at its two Massena, New York smelters in April 2003. The re-start, which will begin this week and is expected to take approximately three months to complete, is expected to generate 10,000 metric tons of aluminum this year. Upon completion, the two smelters will be operating at capacity.

"Various market conditions -- including favorable short-term power availability and strong demand for premium products -- warrant our taking steps to re-start the 24 percent of production that we idled last year," said Alan Cransberg, Alcoa's President of U.S. Primary Metals. Alcoa is expected to hire approximately 45 people as part of the re-start effort, bringing total employment in Massena to approximately 1,310 people.
 
"While this re-start is certainly good news for the employees and the community at-large, we still have much work to do for the long-term future of the facility," said Cransberg. "Alcoa's Massena Operations is the oldest continuously operating aluminum production and fabricating facility in the western hemisphere. Modernization is key to its long-term viability, especially at the East Plant given the nature of its technology, and is something we will immediately consider in conjunction with a long-term power contract with the New York Power Authority," added Cransberg.
 
Massena Operations is the largest private employer north of Syracuse, contributing $250 million annually to the local economy in payroll, local purchases and tax payments. The East Plant was facing closure in late 2002, but a temporary economic incentive offered by NYPA and a joint labor-management restructuring effort allowed it to remain operating. In April 2003, production was reduced as a result of the continued low hydroelectric conditions (water levels) in the Great Lakes system requiring the purchase of higher cost replacement power and raw material prices.
 
Nelson Dube, Massena Primary Metals Operations Manager said, "We are fortunate that our employees, United Steelworkers' union leadership, community leaders, elected officials and NYPA have all worked together in the past to solve the complex problems that face an aging facility. As we go back to full production, we will need the same group -- and more -- to work together to save the nearly 1,350 jobs here.
 
"NYPA has been and continues to be an important business partner for the Massena facilities," Dube said. "Back in late 2002, NYPA recognized that our employees had significantly improved our cost performance and profitability in areas we could control. Then NYPA stepped forward and worked aggressively with us on an agreement that allows them to meet their obligations to the citizens of New York while allowing Alcoa to continue to provide strong family wage jobs in the North Country. Due to improved market conditions, we began returning portions of the economic incentive to NYPA earlier this year while continuing to remain competitive."
 
"Local 450A is very pleased that the restart will bring back jobs to the community. Hopefully, Alcoa and NYPA will sit at the negotiating table again and agree to a long-term contract that will benefit all involved," said Steve Peets, President of USWA Local 450A. "These re-starts are good news for the membership and the Community," said Aluminum Brick and Glassworkers International Union President Emeritus Ernie LaBaff. "Increasing production is always welcome news. I now call on both parties, Alcoa and the Power Authority, to complete negotiations as soon as possible, because low-cost power is the economy of Northern New York."
 
Alcoa is the world's leading producer and manager of primary aluminum, fabricated aluminum and alumina facilities, 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 to customers. In addition to aluminum products and components, Alcoa also markets consumer brands including Reynolds Wrap(R) foils and plastic wraps, Alcoa(R) wheels, and Baco(R) household wraps. Among its other businesses are vinyl siding, closures, fastening systems, precision castings, and electrical distribution systems for cars and trucks. The company has 120,000 employees in 42 countries and has been a member of the Dow Jones Industrial Average for 45 years and the Dow Jones Sustainability Indexes since 2001. More information can be found at www.alcoa.com