Arconic Progresses with Plan to Split Businesses

Researched by Industrial Info Resources (Sugar Land, Texas)--Less than three years after it split away from Alcoa Corporation (NYSE:AA) (Pittsburgh, Pennsylvania), aluminum rolling, plate and aerospace components manufacturer Arconic Incorporated (NYSE:ARNC) (Pittsburgh) is moving forward with its own big split.

Arconic plans to split into an aerospace-oriented engineered products and forgings business and a rolled products business by second-quarter 2020. Both companies will be headquartered in Pittsburgh. The global rolled products company will comprise rolled aluminum products and aluminum extrusions. The engineered products and forgings business will include engine components, fastening systems and engineered structures. Industrial Info is tracking $1.5 billion in project activity by Arconic.

Click on the image at right for a graph showing Arconic project activity by industry sector.

"We plan to appoint two new CEOs [chief executive officers] and business teams later in 2019," said Arconic Chief Executive Officer John Plant on Tuesday during the company's first-quarter earnings conference call with industry analysts. "We will create two boards as we move into 2020."

Arconic also will sell off certain of its businesses with annual revenues of $400 million that "either do not fit with the Arconic focus or are not material to its bottom line."

For 2019, Arconic expects capital expenditures to be $650 million, down from its February guidance of $700 million, as the company continues its drive to cut costs. The company now plans to achieve $230 million per year in operational cost savings, up from its initial savings target of $200 million.

One of Arconic's active projects now underway is its $100 million investment to expand its hot mill capability and add downstream equipment capabilities to manufacture industrial and automotive aluminum products in its Tennessee Operations facility near Knoxville, Tennessee. The upgrades are expected to be complete by the fourth quarter of 2020. For more information, see Industrial Info's project report.

During the earnings conference call, Arconic executives also mentioned the expansion of its jet engine components casting plant in Whitehall, Michigan. The project entails an additional 103,000 square feet and the addition of incremental casting furnaces, among other things. Completion is planned for fourth-quarter 2020. For more information, see Industrial Info's project report.

In Waco, Texas, an Arconic fastener and ring manufacturing plant upgrade was nearing completion. New equipment and machinery was being installed to manufacture heavy duty fasteners. For more information, see Industrial Info's project report.

In addition to tracking Arconic's capital projects, Industrial info is monitoring more than $47 million worth of maintenance-related projects.

For first-quarter 2019, Arconic reported net income of $187 million, up from $143 million in first-quarter 2018.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.