Alcoa Boosting Aerospace Capabilities in Virginia to Meet Demand for Next-Gen Aircraft Engine Parts

June 17, 2014

Scaling-Up Technology that Cuts Weight of Highest-Volume Blades by 20 Percent and Enhances Aerodynamic Performance for Increased Fuel Efficiency

  • $25 million technology investment to produce lighter, primarily nickel-based airfoil blades for industry’s best-selling jet engines
  • Will use advanced manufacturing technologies including robotics and digital x-ray
  • 75 new employees over three years

Leading aerospace manufacturer Alcoa (NYSE: AA) is expanding in Virginia
to capture demand for next-generation aircraft engine parts. The Company
is investing $25 million at its Alcoa Power and Propulsion facility in
Hampton, Virginia to scale-up a breakthrough process technology that
cuts the weight of its highest-volume jet engine blades by 20 percent
and significantly improves aerodynamic performance.

“We are deploying a state-of-the-art technology that will significantly
improve the performance of some of the best-selling jet engines in the
world,” said Alcoa Chairman and CEO Klaus Kleinfeld. “This technology
and investment further demonstrate how Alcoa is executing on our
strategy to aggressively capture demand in the fast-growing aerospace

Alcoa will add equipment for a new production line and modify existing
machinery at the Hampton facility to produce the blades. The Company
will use the latest in advanced manufacturing technology such as
robotics and digital x-ray for enhanced product inspection. The
expansion will begin this month and is expected to be complete by the
fourth quarter of 2015. The Company expects to add at least 75 new,
full-time employees over three years.

Alcoa developed this process technology, called enhanced equiax (EEQ)
casting, following five years of research and development at the Alcoa
Power and Propulsion Research Center in Whitehall, MI. The Alcoa
Technical Center, the world’s largest light metals research and
development center based outside of Pittsburgh, PA, also supported this
work. Made primarily using nickel-based superalloys, the lighter and
more aerodynamically efficient blades can be used to retrofit existing
or build next-generation aircraft engines, such as the latest engines
for large commercial aircraft, including narrow- and wide-body
airplanes. Engines for narrow-body aircraft are among the top selling
jet engines in the world.

“Alcoa has been a solid corporate institution in Hampton for 40 years,
and this major investment in new technology and the launch of a new
product line will ensure the longevity of its operation for decades to
come,” said Governor Terry McAuliffe. “Advanced manufacturing is
thriving in Virginia, and expansions like this help to diversify our
economy and grow jobs of the 21st century. This project is a great
testament to Alcoa’s commitment to Virginia, and the advantages of the
Commonwealth’s top-rate business environment that helps valued global
companies succeed.”

Alcoa will receive approximately $2 million in state and local
incentives and an additional $1.3 million exemption on sales and use tax
for selecting Hampton, Virginia for this investment.

“Alcoa has been a longtime anchor employer in the City of Hampton. I am
extremely pleased that Alcoa chose to expand in Hampton by adding a new
advanced manufacturing product line that will generate high-paying
jobs,” said Hampton Mayor George Wallace. “Hampton is an excellent city
for new and expanding businesses. We are proud of our highly skilled
workforce, friendly neighborhoods, excellent schools and quality of life
that is incomparable.”

This investment supports Alcoa’s strategy of profitably growing its
aerospace business, which had revenues totaling $4 billion in 2013. The
Company holds leading market positions in aerospace forgings,
extrusions, jet engine airfoils and fastening systems and is a leading
supplier of structural castings made of titanium, aluminum and
nickel-based superalloys, which are produced by its downstream business,
Engineered Products and Solutions (EPS). The Company also holds leading
market positions in aerospace sheet and plate produced by its midstream
business, Global Rolled Products (GRP). The Company’s value-add
businesses, comprising EPS and GRP, accounted for 58 percent of Alcoa’s
first quarter 2014 revenues and 76 percent of the Company’s total
segment after-tax operating income.

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Alcoa in Virginia
Alcoa’s Hampton facility currently employs
650 people who operate two production lines that produce turbine blades
for the power generation market and large nickel and titanium structural
castings for aerospace engines. In addition, the Alcoa Fastening Systems
business has a sales office in Leesburg and Alcoa’s Building and
Construction Systems business has a drafting and engineering support
office in Harrisonburg.

Reinforcing Alcoa’s commitment to Virginia, and in celebration of the
expansion, the Alcoa Foundation has agreed to grant $40,000 to a local
nonprofit organization that supports the Alcoa Foundation’s goals of
promoting education, including the development of advanced manufacturing
skills and environmental sustainability. The Foundation expects to
announce the organization that will receive the grant this summer.

About Alcoa
A global leader in lightweight metals
engineering and manufacturing, Alcoa innovates multi-material solutions
that advance our world. Our technologies enhance transportation, from
automotive and commercial transport to air and space travel, and improve
industrial and consumer electronics products. We enable smart buildings,
sustainable food and beverage packaging, high-performance defense
vehicles across air, land and sea, deeper oil and gas drilling and more
efficient power generation. We pioneered the aluminum industry over 125
years ago, and today, our 60,000 people in 30 countries deliver
value-add products made of titanium, nickel and aluminum, and produce
best-in-class bauxite, alumina and primary aluminum products. For more
information, visit,
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Forward-Looking Statements
This release contains statements
that relate to future events and expectations and as such constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements include those
containing such words as “anticipates,” “estimates,” “expects,”
“forecasts,” “plans,” “projects,” “should,” “could,” “may,” “seeks,”
“targets,” “will,” or other words of similar meaning. All statements
that reflect Alcoa’s expectations, assumptions or projections about the
future other than statements of historical fact are forward-looking
statements, including, without limitation, statements regarding Alcoa’s
strategy, objectives, expectations, and intentions regarding growing its
aerospace capabilities and business; the improvement in performance of
jet engines achieved by Alcoa’s advanced manufacturing and process
technologies; and the expected timing for completion of expansion of
Alcoa’s Hampton, Virginia facility and increase in employment levels.
Forward-looking statements are subject to a number of known and unknown
risks, uncertainties, and other factors and are not guarantees of future
performance. Important factors that could cause actual results to differ
materially from those expressed or implied in the forward-looking
statements include: unfavorable changes in the markets served by Alcoa,
including the aerospace market; failure to successfully implement, or to
realize expected benefits from, new technologies, processes, equipment
or innovative products, whether due to competitive developments, changes
in the regulatory environment, trends and developments in the aerospace,
metals engineering, and manufacturing sectors, or other factors; and the
other risk factors discussed in Alcoa’s Form 10-K for the year ended
December 31, 2013 and other reports filed with the Securities and
Exchange Commission. Alcoa disclaims any intention or obligation to
update publicly any forward-looking statements, whether in response to
new information, future events or otherwise, except as required by
applicable law.

Investor Contact
Kelly Pasterick, 212-836-2674
Media Contact
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