BUSINESS REPORT: Tennessee — Alcoa Expands Auto Sheet Operation In Blount County
By Ed Felton
From the May/June 2013 issue
Alcoa Inc. plans a $275 million expansion of its Blount County operation that officials said will help insure the company remains a key player in the local economy for decades.
The aluminum company announced that it will expand its rolling mill operation in Alcoa to meet growing demand for light, durable and recyclable aluminum sheet for the automotive industry. The expansion is expected to generate 400 construction jobs plus 200 “full-time, high-value jobs,” at the plant, company officials said.
TENNESSEE FAST FACTS
- Population (2011 Est.): 6,403,353
- Largest Cities (2011): Memphis, 652,050; Nashville-Davidson (balance), 609,644; Knoxville, 180,761; Chattanooga, 170,136
- Targeted Industries: Warehousing & Distribution, Headquarters & Back Office Operations, Data Centers, Call Centers, Manufacturing
- Key Incentives: Jobs Tax Credit, HQ Tax Credit, Data Center Tax Credit, Community Development Block Grant, Small Business Energy Loan Program
- GDP (All Industry 2011): $266.5 billion*
*Bureau of Economic Analysis, U.S. Department of Commerce
“I have to think this secures our future for another 25 year cycle,” Alcoa Tennessee Operations Location Manager Ken McMillen said.
News of the expansion comes not long after Alcoa announced it was permanently closing its mothballed smelting operation, leading some in Blount County to wonder if the company would continue to operate there.
“We all felt a very profound sadness when the pot rooms closed. And now, it’s like we are having an old, trusted friend coming back, even stronger, even bigger,” Maryville Mayor Tom Taylor said at a Thursday news conference at the Blount Partnership headquarters.
Taylor plus Alcoa Mayor Don Mull, Blount County Mayor Ed Mitchell and Blount County Commission Chairman Jerome Moon joined in announcing the expansion.
Kingsley Brock of the Tennessee Department of Economic and Community Development said getting the plant expansion was an effort involving local government, local Alcoa company officials, the Blount Partnership and the state.
Gov. Bill Haslam released a statement praising the effort. “Our Jobs4TV strategy identifies key industry clusters where Tennessee holds a unique competitive advantage, and we are grateful Alcoa is expanding its presence and joining in our state’s continued growth in the automotive sector,” Haslam said.
The project will involve expanding and converting the capacity at the rolling mill. McMillen said this will involve converting some can sheet capacity to produce high-strength, automotive sheet plus adding new equipment for that purpose.
Construction work is set to begin this month and be completed in 2015. The Alcoa operation, which at present primarily makes aluminum sheet for beverage cans, will become a key supplier to both that and the automotive market.
The expansion also represents a technological advancement for Alcoa Inc. The process will use a proprietary pre-treatment bonding technology to allow adhesive bonding of automotive structures to allow more cost-effective, mass production of “aluminum intensive vehicles.” Called Alcoa 951, Alcoa is licensing the technology at the request of automotive original equipment manufacturers.
Bryan Daniels, Blount Partnership president and CEO, said the effort to get the plant expansion came when Alcoa Inc. began looking to expand its North American production to produce automotive aluminum sheet.
“Over several months, the partnership engaged in negotiations with Alcoa to broker a deal to create the capital investment and jobs,” Daniels said. “The state is putting some training dollars into the project and we are trying to do some road improvements to facilitate the increased traffic that will be due to the expansion.”
The expansion will help cement the company’s presence in the community, he said. “What this does for us is that they are no longer a one-product line in can sheet. They are diversified, which makes Alcoa’s Tennessee operations much more viable,” Daniels said.
McMillen said the expansion is an example of Alcoa adapting to shifting market forces. In the late 1980s, the company began modernizing operations to capture the aluminum sheet recycled from beverage cans.
As the market for raw aluminum weakened in 2009, Alcoa mothballed its Blount County smelting operation, laying off 450 workers. At the same time, the market for recycled aluminum sheet was strong enough that in 2010, Alcoa unveiled a $24 million expansion of its recycling operation. In January 2012, Alcoa announced it was closing its smelting operation for good.
McMillen said the recycling market has softened a bit, but the automotive market is taking off. By 2015, cars will contain four times the amount of aluminum as now, he said. By 2025, it may be 10 times as much, McMillen said.
TeamHealth Adding 500 Jobs
Tennessee Gov. Bill Haslam recently joined with representatives from TeamHealth to announce the company’s plans to expand its corporate operations by leasing a new facility to be constructed at Base Pointe Business Park in Alcoa, TN. The project developers will invest nearly $18 million and create 160 full-time jobs, with the anticipation of growing to 550 jobs in management, accounting, medical coding, billing and clerical positions.
“I appreciate TeamHealth’s commitment to and investment in Blount County,” Haslam said. “We will continue to focus on creating a business climate that gives companies the confidence to invest and create jobs as we work toward becoming the No. 1 location in the Southeast for high quality jobs.”
Founded in 1979, TeamHealth is headquartered in Knoxville, TN. Through its six principal service lines located in 13 regional sites, TeamHealth’s more than 6,600 affiliated healthcare professionals provide emergency medicine, anesthesiology, hospital medicine, and pediatric staffing and management services to more than 700 civilian and military hospitals, clinics and physician groups in 45 states. TeamHealth has provided the emergency department physician services at Blount Memorial Hospital for 25 years.
The new facility will be the company’s second facility in Alcoa, with the first housing 400 employees. Blount County has committed to improving the roadways on Topside Road and Wrights Ferry Road just off the Pellissippi Parkway (Exit 9 on I-140) to accommodate increased traffic flow. “The Blount Partnership is excited about this fantastic opportunity for Blount County and the Innovation Valley Region,” Bryan Daniels, president and CEO, Blount Partnership, said.
Carbon Fiber Plant Opens in Innovation Valley
Officials from the United States Energy Department, Oak Ridge National Laboratory (ORNL), Ford Motor Company, and Dow Chemical, along with Tennessee Gov. Bill Haslam, cut the ribbon on a new Carbon Fiber Technology Facility in Innovation Valley.
The 42,000-square-foot facility will produce up to 25 tons of carbon fiber each year providing clean energy companies and researchers with the material, infrastructure, and technical resources necessary for the development of less expensive, better performing carbon fiber materials to be used in various manufacturing processes.
“The new facility paired with the current Carbon Fiber Consortium will put Innovation Valley at the forefront of automotive component manufacturing,” said Doug Lawyer, vice president for Economic Development at the Knoxville Chamber.
A strong, stiff, lightweight material, carbon fiber is expected to help American manufacturers dramatically lower the cost and improve the performance of wind turbines, energy storage components, and fuel-efficient vehicles. “This continues ORNL’s track record of developing new materials and processes that spawn new products and industries,” said Thom Mason, chairman of Innovation Valley and director of ORNL.
The project is supported by a $35 million grant funded through the federal government’s Clean Energy Manufacturing Initiative.
REGIONAL MEGASITE IN MEMPHIS
- The Memphis Regional Megasite consists of 3,840 contiguous acres, owned by the State of Tennessee, with a reserved, square-shaped core site of 1,720 acres.
- The Regional Megasite area’s central location, strong transportation infrastructure, low costs of doing business and high-quality workforce provide an attractive setting for investments and new businesses.
- More than 80 percent of the core site is unforested and cleared, with no endangered species, archeological impediments or residents on site.
- The Megasite is immediately available; there are no flood zones on the site; it features low water tables and minimal wetlands. There is excellent topography and all drainage begins on site. A fast rezoning process is guaranteed.