Trentwood rebounds amid Kaiser losses
Kaiser Aluminum Corp. lost $746.8 million last year amid bankruptcy write-downs and the surrender of benefit plans including those for pensions and retiree medical coverage.
There was some good news: sales of fabricated aluminum rose sharply as evidenced by renewed hiring at the Trentwood rolling mill.
With 500 employees and strong demand for aluminum sheet used to make aircraft, Trentwood has rebounded from the recession and remains a dominant manufacturing employer in Spokane.
“Trentwood is seeing some very good market conditions,” Kaiser spokesman Scott Lamb said after the release of the company’s 2004 financial statement.
Kaiser, which has moved its headquarters from Houston, Texas, to Orange County, Calif., plans to emerge from its Chapter 11 bankruptcy during the last half of the year, later than the company anticipated.
A plan of reorganization and an accompanying disclosure statement should be released within a matter of months.
Kaiser’s big year-end loss is the latest in a string of massive bankruptcy-related red ink that the company has reported. In 2003, Kaiser posted a loss of $788.3 million.
If the company survives bankruptcy, it will look very different than the powerful metals firm with far-flung operations in many parts of the world.
By the time crippling debts matured and the aluminum market turned south, the company had liabilities of $3.1 billion versus assets it assumed were worth $3.3 billion.
Many of those assets turned out to be worth a fraction of their book value. For example, the Mead and Tacoma smelters were carried on Kaiser’s books as a $160 million asset, but sold for about $20 million in two separate transactions.
And the company’s Gramercy, La., alumina refinery, which Kaiser spent more than $275 million rebuilding after a 1999 explosion, has been sold for $23 million.
Yet the company has had success selling properties, including bauxite mines and alumina plants in Jamaica, and it anticipates a favorable price for its ownership stake in an alumina refinery in Australia.
The sales are part of Kaiser’s strategy to leave the commodities end of the aluminum business and instead focus on making and selling fabricated aluminum.