State incentives help land Alcoa expansion in Quad Cities

Officials with the Davenport Alcoa Works say a $3 million state incentive awarded Thursday by the Iowa Economic Development Board will pave the way for a $300 million expansion that will impact up to 500 jobs and enable the company to produce high-tech aluminum for the automobile industry.

“No ifs, ands or buts, it was a big help in making sure that it was secured here,” said Kevin Lowery, Alcoa director of corporate communications, following the DED Board's unanimous approval of a forgivable loan and other incentives to assist the project. “We wanted to do it here in Iowa and this helped seal the deal.

We're very happy.”

Lowery said the proposed expansion will retain 200 existing factory jobs, while creating 150 construction jobs and another 150 permanent factory jobs once the project is up and running at facilities located in the Riverdale and Bettendorf areas that currently employ about 2,100 workers.

“It would be our anticipation that we would complete the expansion by the end of 2013 and be ready to go on Jan. 1, 2014,” he said.

Gov. Terry Branstad, who set a goal of creating 200,000 jobs in five years, has scheduled a 1:30 p.m. news conference in Des Moines with Alcoa officials to discuss the project.

Debi Durham, director of the state Department of Economic Development, called the Alcoa expansion “a huge deal” for Iowa because the company is serviced by a lot of Iowa companies in the supply chain, which will have spin-off economic benefits.

“This is just an example of what we're seeing in our pipeline right now – we're seeing big capital projects,” Durham said. “I think from an industry point of view there's a confidence in Iowa and the direction that Iowa's going that industries are spending this kind of money here. So we're very encouraged.”

Lowery said the expansion will represent Alcoa's new foray into supplying lightweight aluminum to car manufacturers looking for ways to improve fuel efficiency to meet new federal corporate average fuel efficiency (CAFÉ) standards by the 2016 model year.

Original equipment manufacturers expect to double the current average of 8 percent of the metal content in cars being aluminum by 2020, he noted. The addition of more light weight aluminum will allow car makers to replace eight-cylinder engines with six-cylinder units without sacrificing power and performance while improving fuel efficiency.

“As consumers are looking at more fuel-efficient cars and with new CAFÉ standards in place to increase fuel efficiency, the best way to do that is by switching from steel to aluminum, so more OEMs are in the process of doing that,” Lowery said.

Alcoa officials expect to renovate nearly 153,000 square feet and add another 27,000 square feet to its production facility.

“Obviously, we've got a great workforce in Davenport. It's a fabulous facility. It's a pillar for our aerospace business,” Lowery said. “There's not a plane flying in the world that doesn't have metal coming out of that plant. Now, it will be the hope, that there won't be a car driving on the road in the United States that won't have metal coming out of that plant. That's the hope.”