Word: alcoa
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Dates: during 1940-1949
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...omnivorous for Theodore Roosevelt's liking, a U.S. court broke it up into 34 competing companies. Last week, Attorney-General Tom C. Clark recommended to Congress that the same thing be done to another titan, the Aluminum Company of America. Said he: only by breaking up Alcoa into several smaller, competing companies can true and permanent competition be brought to the aluminum industry...
...Clark's 140-page brief made one prime point: the $670,000,000 aluminum plants owned by the Defense Plant Corp. cannot compete with Alcoa if they are turned over to private hands. In general, the DPC plants are more expensive to operate as a unit than are Alcoa's, because they are not as well integrated, i.e., fabricating plants are often hundreds of miles from ingot plants. To get them into production fast, many were built to mesh with Alcoa's own plants. The DPC plants can compete, said Tom Clark, only with the help...
Furthermore, said he, there is now no demand for all the aluminum the nation can make, small chance of finding a market so long as Alcoa occupies its present dominating position. Businessmen, said he, will not switch from brass and steel to aluminum and "risk being at the mercy of a monopoly." His solution: break up Alcoa and integrate the DPC plants with the several new companies as well as with the two other wartime aluminum producers. Reynolds Metals and Olin Industries. Tom Clark figured that this would bring lower prices, and a market big enough...
...Government last week moved to force more competition in the aluminum industry. Effective Oct. 31, the Reconstruction Finance Corp. will take back the seven plants built for it by the Aluminum Co. of America (construction cost: $250 million). Alcoa had been operating the plants for RFC under leases which would have expired in 1947 and 1948. RFC was willing to let Alcoa continue under one condition: that the company agree to relinquish the plants at any time on 60 days' notice. When Alcoa refused, RFC canceled the leases, released the plants for sale to create "competition in the aluminum...
...there have been no takers. Reason: the chances of getting any new competitors in the aluminum business now are almost nonexistent. The highest alltime prewar aluminum consumption in the U.S. was under 400 million pounds. Alcoa alone can produce more than twice that amount -860 million pounds. Reynolds Metals can add another 160 million. Already on hand is a war-built stockpile of a billion pounds. Thus RFC must find operators willing to take a long chance, or (more likely) shut down the plants...