EuroWire March 2015

Transatlantic cable

Alcoa Wheel and Transportation Products (AWTP), headquartered in Cleveland, Ohio, is part of Alcoa’s downstream business, serving the commercial vehicle, automotive and defence markets. The company projects its own revenues from wheel products to rise to $1 billion in 2016 from $700 million in 2013.

Steel and aluminium

† Three months in, some 10 to 15 per cent of the steel made at the Faircrest plant of TimkenSteel Corp (Canton, Ohio) is running through the company’s new continuous jumbo bloom caster, unique in its being completely vertical. As described by manufacturing reporter Rachel Abbey McCa erty in Crain’s Cleveland Business (29 th January), the 270-foot caster – 180 feet above ground and 90 below – “does create a striking image.” TimkenSteel invested about $200 million in the caster, believed to be the largest of its kind in the world. It is certainly the sole example of the design in North America. The poured molten steel is extracted slowly from the tundish at the top and split into three strands. When the steel reaches the bottom it is cut into blooms. According to the company, the process yields cleaner, higher quality steel. The caster is still in the hot commissioning phase but it is expected to handle about 60 per cent of the plant’s melt by the end of the year. By 2017, TimkenSteel plans to be running 85 per cent of the melt through the caster, the rest through an ingot pour. At full capacity the vertical caster has potential to raise shippable capacity at Faircrest by 25 per cent, or 165,000 tons per year. † According to Alcoa, global sales of aluminium wheels are expected to increase from 30 per cent of the total market in 2010 to 50 per cent in 2018. Positioning itself to meet anticipated European demand for its lightweight aluminium truck wheels, the New York-based aluminium manufacturer on 30 th January announced the completion of a $13 million expansion that doubles capacity at its wheels manufacturing plant in Hungary. Demonstrating support for the project, the Hungarian government agreed to contribute $4.4 million through its Regional Operative Program, a government-led economic development initiative. Under a pilot programme, a number of buses in the regional Székesfehérvár city transportation system are to be out tted with Alcoa wheels.

The USA economy

A strong dollar helps consumers but hurts American corporations doing business overseas

While the American public enjoys the bene ts of a swiftly growing domestic economy – lower oil prices, rock-bottom interest rates, a greatly improved employment picture, a strong dollar – big US-based companies with business abroad are experiencing the bad e ects. The strong dollar, in particular, is hitting a wide swathe of corporate America, slicing sales and pro ts and reviving a concern for cost-cutting. On 27 th January, the machinery maker Caterpillar, which exports many of its products, cited a too-strong dollar as contributing to its disappointing earnings for fourth-quarter 2014. A day earlier, the multinational computer software giant Microsoft had also blamed its lacklustre results on the robust dollar. While the United States is not an export-driven economy, many of its largest companies rely heavily on overseas sales. Because these multinationals will inevitably su er from the combination of a stronger dollar and a sluggish global market, analysts say they expect many other rms to see a weaker bottom line this year. The disparity of outlook between American consumers and multinationals was underscored by a report from the Conference Board, a private research group, that its index of consumer con dence jumped to 102.9 in January from a revised 93.1 in December (originally reported as 92.6). Economists surveyed by the Wall Street Journal had forecast a rise in the latest index to a more modest reading of 95.1.

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March 2015