Alcoa to fund internships with $1.25M as part of 125th anniversary

| Monday, Sept. 30, 2013, 11:21 a.m.

Alcoa Inc. will benefit from “a once in a lifetime shift” by the auto industry toward using more aluminum in its best-selling vehicles, CEO Klaus Kleinfeld said on Monday.

“The big change is, aluminum has a leg up” on steel, Kleinfeld said in Alcoa's Corporate Center on the North Shore during the company's 125th anniversary celebration.

Though aluminum always had an advantage because of its lighter weight, “automotive firms were not ready to switch over for full-scale production, particularly with their volume cars,” he said. They are now, as they gear up to meet the government's 54.5 mpg target by 2025 with lighter-weight materials.

Alcoa, the nation's largest aluminum company, is building three plants to produce body sheet for the auto industry — in Davenport, Iowa, which will go online by the end of this year; in Saudi Arabia, to serve international and U.S. markets by 2015; and in Alcoa, Tenn., which will start production in 2016.

“That capacity is fully sold out,” though production hasn't begun, Kleinfeld said. More aluminum in high-volume vehicles “means we'll see a gigantic increase in demand for automotive material, which is a great growth story.”

Alcoa employs about 2,000 in the Pittsburgh region, including Alcoa Technical Center in Upper Burrell and Traco Co., a window manufacturer in Cranberry. Executive offices are in New York.

“This is a pretty great day for all of us,” Kleinfeld said, leading hundreds of employees, politicians and descendants of founders in singing “Happy Birthday.”

Incorporated on Oct. 1, 1888, as Pittsburgh Reduction Co., the company was founded by Charles Martin Hall and had a pilot plant in the Strip District.

At the turn of the century, aluminum was considered a “miracle metal” that weighed much less than other metals and didn't rust. Hall and his sister, Julia, discovered a method to produce the material cheaply and built the company with the help of Alfred Hunt and Arthur Vining Davis.

“Those are the giants whose shoulders we stand on. ... It's our DNA, and we never should forget,” Kleinfeld said. Hunt's descendants — Mary Caroline, Todd, Marian and Bill Hunt — showed a historical marker that will be placed on the site of the company's first plant on Smallman Street.

Kleinfeld cited recent reports that he said back up claims that aluminum can cut 40 percent of the weight from the vehicle chassis and bring total weight savings of about 10 percent, equaling 7 percent fuel efficiency savings.

In one of the reports, Lloyd O'Carroll, an analyst at Davenport & Co. in Richmond, Va., said: “We see this as the most important, transformative trend for the aluminum industry on a medium and long-term basis since the introduction of the aluminum can.”

At the kickoff event, the Alcoa Foundation announced a $1.25 million internship program for unemployed youths in eight countries. Catalyst Connection, a Pittsburgh nonprofit that helps manufacturers, will receive $125,000 under the program. It and other nonprofits will help recruit volunteers to mentor interns and share manufacturing expertise.

“To educate and train young people well is fundamental for allowing them to create their own future,” Kleinfeld said.

Alcoa executives in Australia, Brazil, Canada, France, Jamaica, Spain and the United Kingdom will select other nonprofit organizations with job-readiness programs to place students in internships with manufacturers.

John D. Oravecz is a Trib Total Media staff writer.

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