April 25, 2007 — Alcoa Inc. plans to "explore strategic alternatives for the disposition" of several operating divisions, including of its Automotive Castings business. Alcoa's Casting Solutions organization is part of the Alcoa Auto and Truck Structures division, which supplies high-strength, cast aluminum suspension and chassis components produced using vacuum riserless casting/pressure riserless casting (VRC/PRC) technology. The plants in Kentucky, Michigan, Germany, and Norway produce subfames, knuckles, rear hubs, crossmembers, swing arms, control arms, and other high-stress components, for customers that include Audi, Ferrari, General Motors, Jaguar, and Lamborghini.
The decision to seek a spin-off was announced by Alcoa in connection to a broader initiative to seek "strategic alternatives" for its Electrical and Electronic Solutions (formerly the AFL wireharness business), Flexible Packaging, Closure Systems, Consumer Products, and Reynolds Food Packaging divisions.
“We are in an enviable position with our other downstream businesses,” stated Alcoa chairman Alain Belda. “The group of assets in our Flat Rolled Products segment is without question the best in the world, as are our hard alloy extrusions, forgings, fasteners, investment castings, structures and building systems. Our proprietary technology and unique equipment set us apart from anyone else in the world in these areas.”
Last year, Alcoa outlined a "targeted restructuring" of downstream operations, which concerned spinning off its soft-alloy aluminum extrusion business.
Alcoa expects the exploration process will be completed this year. “While there can be no assurance that exploration of alternatives will result in any type of transaction, this initiative should unlock the value in these businesses,” stated Belda.