Alcoa applies for DOE loan to expand aluminum plant

The DOE has proposed lending money to aluminum giant Alcoa to increase production at a Tennessee factory, the first loan to a supplier under the Advanced Technology Vehicles Manufacturing program, which was created by Congress in 2007 but hasn’t approved a loan since 2011.

Alcoa spokeswoman Lori Lecker told Automotive News the company has applied for a loan and is in the due diligence phase with DOE. The Tennessee expansion project will cost $275 million and create 200 permanent jobs once completed in mid-2015.

Automakers are using more aluminum to reduce weight and meet tightening fuel-economy requirements – Ford plans to use hundreds of pounds of lightweight aluminum in the body of the redesigned 2015 Ford F-150 pickup truck. Alcoa projects that sales of aluminum sheet to automakers will more than triple to $580 million in 2015 from $160 million in 2012. In January, the company completed a $300-million expansion at its factory in Davenport, Iowa.

“This investment will help auto manufacturers make safe, fuel-efficient vehicles that consumers want,” Alcoa CEO Klaus Kleinfeld said.

Energy Secretary Ernest Moniz announced in April that the DOE has repurposed the ATVM program to be more attractive to auto suppliers, and that the department has $16 billion in low-interest financing available to support efficient-vehicle programs. “We’ve taken concrete steps to make the program easier to work with and more responsive,” said he. “The DOE and the ATVM program are open for business.”

Environmental groups seem to approve. “Lightweight materials are a critical, cost-effective strategy to meeting stronger fuel economy standards,” said Roland Hwang of the Natural Resources Defense Council. “With the buzz around Ford’s aluminum F-150, we expect others automakers to put their lightweighting programs into high gear.”

 

Source: Automotive News
Image Courtesy of Tesla Motors