Manufacturing News

Alcoa asks suppliers to cut costs, blames conditions worse than GFC

Alcoa has requested a 12 per cent discount from its suppliers, explaining that conditions now are worse than during the Global Financial Crisis, with low aluminium prices and a persistently strong Australian dollar hurting the company.

The West Australian reports that Alcoa’s WA general manager of operations, Simon Butterworth, penned the letter, claiming that Alcoa had begun its global efforts to cut costs in Perth.

Alcoa announced earlier this month that it was considering global decreases in production, saying that the price of aluminium had peaked in 2011 and were less than a third of that.

The Australian Steel Institute’s state manager James England said the reduction requested of Alcoa’s suppliers was not possible.

"As if our firms were not under enough pressure, their customers want to squeeze a bit more blood out of them," said England, adding that politicians needed to take action on the currency.

The WA branch of the AMWU called Alcoa “a disgrace" as a corporate citizen.

Butterworth told the West Australian that Alcoa would "work with every supplier to secure the most competitive supply contracts possible".


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