Business News

Alcoa Electrical and Electronic Systems to Restructure Honduran and Mexican Operations Serving North American Auto Market

Monday 14. July 2008 - To Close El Progreso, Honduras Plant, Restructure Choloma, Honduras, and Mexican Locations to Adjust Capacity to Demand

Alcoa (NYSE:AA) today announced that its Alcoa Electrical and Electronic Systems (AEES) business has initiated a restructuring of its Honduran and Mexican operations serving the North American auto market as a result of continued market softness. In total, the workforce reduction across the Honduran and Mexican operations will impact approximately 1,240 jobs as AEES adjusts capacity to economic and structural changes in the North America light truck and SUV market demand.

Upcoming actions include the closure of its electrical distribution (EDS) facility in El Progreso, Honduras, affecting approximately 700 employees, the layoff of approximately 40 workers at the Choloma wire manufacturing facility in Honduras, and approximately 500 AEES associates throughout its Mexico locations in Acuna, Ciudad Juarez, Piedras Negras, and Torreon. AEES currently employs approximately 11,600 associates in Mexico and Honduras.

“The conditions in the North American automotive market are well known,” said Jon A. Jensen, AEES President for Light Vehicle Market and Operations-Americas. “The entire market is facing difficulty. This action is a result of our customers’ significant volume reduction for several vehicle platforms and in no way is a reflection on our workforce, which has done an incredible job under very trying circumstances. Unfortunately, in order to align our capacity with this redefined market demand and to improve overall efficiency and competitiveness, we have had to make this very difficult decision. We will work with the community and stakeholders to try to minimize the impact as much as possible.

“We recognize the impact that this workforce reduction will have on the lives of our employees, their families, and the community,” said Jensen. “Full severance, in addition to a combination of outplacement and transition support services, will be made available to all affected employees.”