Arconic aluminum plant in Tennessee resumes operations

Arconic will restart operations at its Tennessee aluminum rolling mill this week after suspending operations earlier in April due to the coronavirus pandemic, citing its diverse product portfolio and ability to adapt to changing market conditions, the company said Monday.

"In the few short weeks since Arconic's launch as a standalone company, market conditions have been changing rapidly and unpredictably," Arconic CEO Tim Myers said in a statement. "Notwithstanding that, we believe that Arconic's diverse end markets and geographic composition mitigate the impact on the company from any singular area of decline."

Arconic completed a corporate split into Howmet Aerospace and the new Arconic Corp. on April 1.

Myers said Arconic's extrusion facility in New York also resumed operations on April 20. The New York and Tennessee plants were both temporarily idled on April 6 as part of the company's revised operating plan to reduce the impact of the pandemic.

Arconic's Tennessee plant produces aluminum for the automotive and industrial end markets. The company's New York plant serves the industrial, aerospace, defense and automotive industries.

Myers said the facility restarts in the US follow Arconic's return to full production in other parts of the world.

"Despite the challenges that we currently face in North America and Europe, we are seeing positive momentum at our Chinese facilities that felt the full brunt of the COVID-19 pandemic in early 2020 and are now back to essentially normal production," Myers said. "Our Russian packaging facility is running at full operations due to strong end market demand."

According to its preliminary report, Arconic shipped 312,000 mt of aluminum products in the first quarter of 2020, down 6% year on year. The company said the drop in shipments and related revenue was caused by a decline in Boeing's 737 MAX production and pandemic-related disruptions in the automotive, commercial transportation and aerospace markets, although the decrease was somewhat offset by growth in the industrial market.

"Our operating footprint benefits from a highly variable cost structure and we are actively managing operations to effectively flex activity to respond to changing automotive and aerospace market conditions," Myers said.

The aluminum product manufacturer posted an estimated $170 million operating profit on an estimated $1.6 billion in revenue in Q1, compared with a $135 million profit on sales of $1.8 billion in Q1 2019.