Kaiser Aluminum emerges from bankruptcy proceedings
The Associated Press
SPOKANE — Kaiser Aluminum emerged from bankruptcy proceedings today, 41/2 years after the company, which had been Spokane's largest industrial employer, filed for Chapter 11 protection.
Chief Executive Officer Jack Hockema said the company is in position to benefit from a strong market for aircraft aluminum, and is eying a growing market for lighter automobile components.
"Today is a great day for Kaiser Aluminum," Hockema, also chairman and president of the company, said in a statement.
Kaiser is based in Foothill Ranch, Calif., but long has had many of its major operations in the Spokane area. The company also has thousands of retirees in the area.
"I would like to express my gratitude to every one of our stakeholders customers, suppliers, employees and other partners who stood by us over the past four-plus years of challenging times," Hockema said.
Kaiser's stock will be traded on the Nasdaq exchange starting Friday under the symbol KALU. But most of the new stock will be held by special trusts designed to offset medical costs for Kaiser retirees and workers and to fund a new retirement program.
That is good news for the Spokane region, which suffered job and tax losses during Kaiser's bankruptcy proceedings.
Kaiser once employed 2,000 workers in the area, but that fell to fewer than 600 after the February 2002 bankruptcy filing.
Before the bankruptcy, Kaiser was also crippled by a prolonged labor dispute that included what was ultimately ruled an illegal lockout of workers. The West Coast energy crisis several years ago also battered the company, as aluminum production requires large amounts of electricity.
In recent years, Kaiser has focused on producing high-quality aluminum for the aerospace industry, supplying both Boeing and rival Airbus. It dumped low-profit businesses such as making aluminum soft-drink cans.
The company's reorganization plan also dealt with its $100 million liability related to asbestos, which was made and used by Kaiser.
"We are very excited about the future for Kaiser Aluminum," Hockema said.
The company is spending $75 million to expand the capabilities of its rolling mill outside Spokane. It will also consider acquisitions, he said.
"While our markets are cyclic, they are growing," Hockema said. "The global market for aerospace and high-strength products is now exceptionally strong, and our customers forecast additional usage of aluminum plate over the next several years."
Rising gasoline prices will also increase demand for more fuel-efficient vehicles, which should increase business for aluminum auto parts, he added.
Spokane and Kaiser have a long history.
The federal government built an aluminum smelter in Mead and a rolling mill in Trentwood in 1940. The plants drew on the massive power supplied by the Grand Coulee Dam, and made aluminum used by World War II aircraft plants in the Seattle area.
Industrialist Henry J. Kaiser bought the properties after World War II, and for decades they supplied the Spokane area with steady jobs at good wages.
Hockema said the company intends to remain a strong part of Spokane's economy.
Copyright © 2006 The Seattle Times Company