Alcoa's View of the Economy

Sometimes you just have to go to the source. I think Alcoa's (AA) press release yesterday says all you need to know about the state of the economy. Some highlights:

• Smelting output reduced 18%
• Cutting 13,500 workers, or 13% of workforce
• Selling non-core businesses
• Cutting capital expenditures in half

These are extraordinary times, requiring speed and decisiveness to address the current economic downturn, and flexibility and foresight to be prepared for future uncertainties in our markets," said Klaus Kleinfeld, President and CEO of Alcoa Inc. "We are taking a wide-ranging set of aggressive, but prudent, measures to ensure that Alcoa maintains its competitive lead in today's challenging markets while also emerging even stronger when the economy recovers."

"Because we recently completed an extensive competitive analysis, including a strategic review of each business, we have been able to quickly identify and implement effective responses that strengthen our market competitiveness and financial staying power in the economic downturn. We will continue to monitor the dynamic market situation to ensure that we adjust capacity to meet any future changes in demand and seize new opportunities that emerge. These are extraordinary times requiring extraordinary actions," said Mr. Kleinfeld.

Extraordinary, indeed. It ain't every day you hear a CEO talk about the need for "financial staying power."

It feels really good to have stopped out of our long oil position yesterday. As goes the economy, so goes oil demand, and you see what Alcoa expects from the economy.

Comments

[apppro:]

Yeah, let's all just padlock the borders and put up, "Out of Business" signs, too! Be very careful of what you wish for here. The negativity in everyone's reporting has become reality way too easily & quickly.

Jan 08 07:28 AM

[patio:]

Yeah, the reporting of the economic conditions is the problem, not the economic conditions themselves.
No one is wishing anything, as if wishing had some effect. I want to understand as much as I can, in this rapidly changing world, to be (hopefully) armed with some idea how to respond. There is a lot of reporting, and opinionating here and other sites, read it or don't.


On Jan 08 07:28 AM apppro wrote:

> Yeah, let's all just padlock the borders and put up, "Out of Business"
> signs, too! Be very careful of what you wish for here. The negativity
> in everyone's reporting has become reality way too easily & quickly.

Jan 08 08:12 AM

[notsosmart:]

that the problem all along.negativity did not do all this.right now negativity & reality go hand in hand.ask the jobless how they feel.positive?i dont think so.

Jan 08 11:02 AM

[ericinNE:]

You stopped out long, but did you go short?

Jan 09 02:36 AM