Kaiser posts profit in second quarter

Kaiser Aluminum posted a $24.2 million profit during the second quarter of 2004, its first since filing for bankruptcy protection in February 2002.

However, the company also pushed back its deadline to emerge from Chapter 11 until mid-2005 — an ominous sign for Trentwood Steelworkers, who point to a labor contract that expires next year. Steelworkers aren’t anxious to negotiate a new pact while the company’s still under Bankruptcy Court protection.

“We’re not happy that this thing could stretch to next year,” said Dave Carlson, president of Steelworkers Local 338.

Kaiser has lost about $1.3 billion while continuing to operate under the watch of a federal Bankruptcy Court judge.

The $24.2 million in second-quarter earnings compares with a $61.4 million loss during the same period last year.

CEO Jack Hockema pointed to the sale of Kaiser’s Mead smelter and higher prices for aluminum products for the increase.

The company recorded a $23.4 million gain from the smelter sale last spring.

Kaiser does not break out financial results for its Trentwood rolling mill, but Carlson said that Spokane Valley operation recently hired 17 people and plans to add another 13 Steelworkers to the payroll soon as orders grow for the specialized aluminum sheet made there. Trentwood employs about 440 currently.

Kaiser wants to emerge from bankruptcy protection and operate several factories that make and market aluminum products, such as the aluminum rolled at Trentwood and sold to the aircraft industry. Called the fabricated products division, these Kaiser plants operated at a $5 million profit during the April-through-June period.

Yet Kaiser faces serious hurdles before attempting to emerge from bankruptcy next year. The lengthy process of selling smelters and refineries has pushed back the company’s original goal of doing so this year.

Also, Kaiser has yet to resolve its pension obligations. The federal Pension Benefit Guaranty Corp. has not taken over several of the company’s retirement plans as envisioned by Kaiser officials. Among those plans is the one covering thousands of retired Steelworkers.

Hockema did say the company expected to file a plan of reorganization by the end of the year, but the plan would need approval from creditors and the Bankruptcy Court.