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UPDATE: Manufacturer plans $110M expansion, 329 jobs

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Gov. Mike Pence is traveling to northern Indiana for what his office calls an economic development announcement involving hundreds of jobs.

The announcement involves the Alcoa Howmet factory in LaPorte, which makes castings for the aerospace and industrial gas turbine industries in a plant about 150 miles north of Indianapolis. Greater LaPorte Economic Development Corp. Executive Director Bert Cook told The Times of Munster that the announcement involves a previously reported expansion plan by the company.

Cook said the investment is expected to result in 329 new jobs and $23 million in additional payroll.

The LaPorte City Council in February approved a 10-year tax abatement for Alcoa Howmet, which had plans to invest $110 million into its 200,000-square-foot manufacturing plant.

Company officials said the plant would make nickel-based engine parts for commercial airliners. Alcoa already makes the same components — in smaller sizes — for engines that go on business jets and planes flown by regional airlines.

Boeing and Airbus are stepping up production as airlines order new, more fuel-efficient planes. Asian airlines in particular are expected to grow rapidly as a booming middle class yearns to travel.

"This is a massive growth market, more than 8 years of backlog," CEO Klaus Kleinfeld said. Alcoa expects aluminum demand from aerospace companies to rise 9 percent this year.

Airlines have long gone through a boom-and-bust cycle, but Kleinfeld said he wasn't worried about that. He said smarter management and Asia's changing demographics will help the airlines.

The Indiana plant will make parts that form the rib cage around a jet engine's vital parts, so its customers are likely to be the big engine manufacturers such as GE and Rolls Royce. Alcoa wouldn't disclose customers, but said it has enough long-term contracts to support the facility, which is due to be completed late next year.

Alcoa said it could get up to $4 million in state tax credits for job creation and another $7.1 million in city tax incentives over 10 years.

The plant is part of Alcoa Inc.'s strategy to downplay its roots as a mining and aluminum-smelting company. Aluminum prices haven't recovered from the deep recession in 2008, and Alcoa has been idling smelters to reduce capacity and cut costs.

The company has been increasing its focus on producing finished aluminum products for aerospace, autos and other industries. Those segments account for more than half of the company's revenue and three-quarters of its after-tax operating income.

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  1. I never thought I'd see the day when a Republican Mayor would lead the charge in attempting to raise every tax we have to pay. Now it's income taxes and property taxes that Ballard wants to increase. And to pay for a pre-K program? Many studies have shown that pre-K offer no long-term educational benefits whatsoever. And Ballard is pitching it as a way of fighting crime? Who is he kidding? It's about government provided day care. It's a shame that we elected a Republican who has turned out to be a huge big spending, big taxing, big borrowing liberal Democrat.

  2. Why do we blame the unions? They did not create the 11 different school districts that are the root of the problem.

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  4. I'm sure Indiana is paradise for the wealthy and affluent, but what about the rest of us? Over the last 40 years, conservatives and the business elite have run this country (and state)into the ground. The pendulum will swing back as more moderate voters get tired of Reaganomics and regressive social policies. Add to that the wave of minority voters coming up in the next 10 to 15 years and things will get better. unfortunately we have to suffer through 10 more years of gerrymandered districts and dispropionate representation.

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