content_image/62688.jpg content_image/62689.jpg
## News ’04 

## Carefree Travel 

Applying knowledge gained from supplying the automo- tive and heavy truck markets, AFL helped motor home manufacturer Fleetwood design electrical systems to meet the specific needs of motor home buyers. This is the first time AFL has supplied wire harnesses for Fleetwood diesel vehicles, creating an opportunity to use ABS tools to design the assembly line for the product. AFL’s Acuña, Mexico, plant successfully introduced make-to-use product assem- bly, with smaller lot size production, reduced lead times, and rapid changeovers. 

## That’s Delivering! 

Via ABS, the Alcoa Mill Products (AMP) Texarkana (TX) plant raised its on-time delivery performance from 56% in 2003 to 94% at year- end 2004. This achievement was enabled by plantwide employee involvement that resulted in more effective links between functional areas and dramatic improve- ments in reliability at critical production centers. For example, improved produc- tion planning connections to the shop floor ensured that task dates were met, and kaizen events and problem solving to root cause raised some key reliability factors by double-digit percentages. Customers responded strongly. AMP gained multi- year supply agreements with strategic customers for 2005 and beyond, and grew its share of the painted products market. 

## Value Selling 

Using ABS to focus on specific customer benefits, Alcoa CSI Argentina achieved a 3% growth in market share – an 11% increase over its business plan – and also added an important new source of revenue. The busi- ness concentrated on 100% product quality, established pull systems with customers, and shortened lead time – resulting in reliable delivery and an average 30% reduc- tion in customer-held inventories. 

## Acquisitions and Divestitures 

• Alcoa and BHP Billiton sold their respective equity interests in Integris Metals, a metals service center company, to Ryerson Tull. 

• Alcoa and Fujikura Ltd. signed a letter of intent in which Alcoa will obtain complete ownership of the AFL Automotive business and Fujikura will obtain complete ownership of the AFL Telecommunications business. The transaction should be completed by spring 2005. 

<img src='content_image/62688.jpg'>

<img src='content_image/62689.jpg'>

• Alcoa Aluminio S.A. sold Itaipava, its flexible packaging business, to Latin American-based Dixie Toga. 

• Alcoa World Alumina and Chemicals sold Alcoa Specialty Chemicals to two private equity firms led by Rhone Capital LLC. 

• Alcoa sold its U.S. Russellville (AR) and St. Louis (MO) aluminum foil plants to JW Aluminum. 

## Know the Market 

By leveraging its known product quality and Alcoa brand strength with original equipment manufacturers (OEMs) and implementing ABS principles to change its manufacturing processes, Alcoa Wheel Products (AWP) enhanced its position in the growing market for customized wheels and achieved production mile- stones. Specialty Wheels reduced time-to-market from the industry average of 38 weeks to as little as five weeks. The business also launched 41 new wheel programs, greatly outpacing their historical six to eight. AWP increased its revenue and profits and benefited OEMs with enhanced original purchase and aftermarket sales. 

## New ACC-U-BAR 

Alcoa Engineered Products, Cressona (PA) added ACC-U-BAR, a premium, high-performance extruded bar product, to its branded bar line. The new product features superior machinability and straightness, suitable for applications that require tighter tolerances and reduced twist. Sales already have exceeded expectations. 

## Sustainable Power 

Following an agreement with stakeholders that inte- grates strict environmental and social goals with long- term economic development, the Brazilian government allowed BAESA, a consor- tium of Alcoa Aluminio and four other Brazilian-based businesses, to proceed with its Barra Grande hydroelec- tric project. Under terms of the agreement, BAESA will increase its investment in various forms of community support to $51 million and its investment in environmen- tal activities to $30 million. Now with 95% of the civil construction completed, the Barra Grande facility will have a capacity of 690 MW, generating 30% of the elec- tricity demand in the Santa Catarina state and the state of Rio Grande do Sul. As part of the Company’s sustainable development practices, Alcoa continues to work with both those who favor and those who oppose the project in formal and informal venues. 

