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ALCAN ALUMINIUM LIMITED SIGNS TEN-YEAR SUPPLY DEAL WITH GENERAL MOTORS — AGREEMENT SIGNALS INCREASED USE OF ALUMINUM IN AUTOMOBILES
The multi-billion dollar agreement ensures the supply of metal from Alcan at competitive cost to meet General Motors' projected needs into the next decade. The agreement breaks new ground in terms of ensuring long-term availability of metal at stable cost -- achieved by way of new smelter investment by Alcan and the use of third-party financial instruments. The financial terms were not disclosed. GM and Alcan will also partner in a number of joint activities, including research, design and technology. The companies will explore new and expanding uses for aluminum, including aluminum-intensive vehicles. 'This aluminum supply agreement provides the basis for the long-term stability of metal costs necessary for the sustainable growth of aluminum use in automobiles,' said Jacques Bougie, president and chief executive officer of Alcan. 'And our recently announced US$1.6-billion Alma smelter in Quebec will help ensure reliability of supply, supported by the groundbreaking 18-year operational stability agreement we have established with our labour union in the region.' 'As we indicated with the recent announcement of our new Global Automotive Products organization [press release Oct. 28, 1998], the auto industry is a key strategic element in Alcan's plans for growth,' added Bougie. 'This agreement with GM further demonstrates our commitment to work with automakers as true partners on stability of supply, price and product characteristics.' Today's announcement is a milestone in Alcan's long-standing relationship with GM. The automaker already uses Alcan technology and aluminum for the 'weld-bonded' structure of its EV1 electric car. The EV1 was the first commercially-available electric passenger car and the first North American production vehicle to feature an all-aluminum structure. In addition, Alcan supplies its DURALCAN metal matrix composite material to GM for brake rotors and driveshafts. 'Through the increased use of aluminum, GM and its customers will benefit from the weight savings, recyclability, and emissions reduction that aluminum can bring to the automobile,' said Donald Macmillan, president of Alcan Global Automotive Products. 'In many automotive applications, aluminum can replace twice its weight in heavier materials such as steel and cast iron. Generally, a 10% reduction in mass yields a 6-8% improvement in fuel economy. The benefit to air quality is significant – every ton of aluminum used in an automobile reduces greenhouse gas emissions by 20 tons over the life of the vehicle.' http://www.alcanautomotive.com
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