Accessibility/Mobile Features
Skip Navigation
Skip to Content
Editorial News
Business
Classified Sites

The Canadian Press - ONLINE EDITION

Hoping to profit from booming aircraft orders, Alcoa building plant to make jet engine parts

This April 7, 2014 photo shows the Alcoa logo in the lobby of Alcoa's headquarters in Pittsburgh. Company officials announced Thursday, May 29, 2014, that they will build a $100 million plant in La Porte, Ind., to make nickel-based engine parts for commercial airliners. Alcoa already makes the same components — in smaller sizes — for engines that go on business jets and planes flown by regional airlines. (AP Photo/Gene Puskar)

Enlarge Image

This April 7, 2014 photo shows the Alcoa logo in the lobby of Alcoa's headquarters in Pittsburgh. Company officials announced Thursday, May 29, 2014, that they will build a $100 million plant in La Porte, Ind., to make nickel-based engine parts for commercial airliners. Alcoa already makes the same components — in smaller sizes — for engines that go on business jets and planes flown by regional airlines. (AP Photo/Gene Puskar)

DALLAS - Alcoa hopes to cash in on the boom in commercial aircraft orders by building a new plant that will make engine parts for big jets.

Company officials announced Thursday that they will build a $100 million plant in La Porte, Indiana, to make nickel-based engine parts for commercial airliners. Alcoa already makes the same components — in smaller sizes — for engines that go on business jets and planes flown by regional airlines.

Boeing and Airbus are stepping up production as airlines order new, more fuel-efficient planes. Asian airlines in particular are expected to grow rapidly as a booming middle class yearns to travel.

"This is a massive growth market, more than 8 years of backlog," CEO Klaus Kleinfeld said in an interview. Alcoa expects the aerospace industry to grow by 8 per cent to 9 per cent this year.

Airlines have long gone through a boom-and-bust cycle, but Kleinfeld said he wasn't worried about that. He said smarter management and Asia's changing demographics will help the airlines.

The Indiana plant will make parts that form the rib cage around a jet engine's vital parts, so its customers are likely to be the big engine manufacturers such as GE and Rolls Royce. Alcoa wouldn't disclose customers, but said it has enough long-term contracts to support the facility, which is due to be completed late next year and eventually employ 329 workers. Alcoa said it could get up to $4 million in state tax credits for job creation and another $7.1 million in city tax incentives over 10 years.

The plant is part of Alcoa Inc.'s strategy to downplay its roots as a mining and aluminum-smelting company. Aluminum prices haven't recovered from the deep recession in 2008, and Alcoa has been idling smelters to reduce capacity and cut costs.

The company has been increasing its focus on producing finished aluminum products for aerospace, autos and other industries. Those segments account for more than half of the company's revenue and three-quarters of its after-tax operating income.

___

Contact David Koenig at http://www.twitter.com/airlinewriter

  • Rate this Rate This Star Icon
  • This article has not yet been rated.
  • We want you to tell us what you think of our articles. If the story moves you, compels you to act or tells you something you didn’t know, mark it high. If you thought it was well written, do the same. If it doesn’t meet your standards, mark it accordingly.

    You can also register and/or login to the site and join the conversation by leaving a comment.

    Rate it yourself by rolling over the stars and clicking when you reach your desired rating. We want you to tell us what you think of our articles. If the story moves you, compels you to act or tells you something you didn’t know, mark it high.

Sort by: Newest to Oldest | Oldest to Newest | Most Popular 0 Commentscomment icon

You can comment on most stories on brandonsun.com. You can also agree or disagree with other comments. All you need to do is register and/or login and you can join the conversation and give your feedback.

There are no comments at the moment. Be the first to post a comment below.

Post Your Commentcomment icon

Comment
  • You have characters left

The Brandon Sun does not necessarily endorse any of the views posted. Comments are moderated before publication. By submitting your comment, you agree to our Terms and Conditions. New to commenting? Check out our Frequently Asked Questions.

letters

Make text: Larger | Smaller

Brandon Sun Business Directory
Sudden Surge: Flood of 2014
Opportunity Magazine — The Bakken
Why Not Minot?
Welcome to Winnipeg

Social Media

Canadian Mortgage Rates