As a public comment period closed earlier this month for new proposed federal fuel-economy standards, a major expansion project was underway in Davenport, Iowa.
Alcoa Davenport Works, which rolls aluminum sheets and plates for the aerospace, defense and automotive industries, is spending $300 million to expand its facility.
The reason: rising demand from automakers for lightweight vehicle materials.
Alcoa announced the expansion in September. The project is expected to create 150 construction jobs, followed by an additional 150 permanent, full-time jobs at the plant.
The aluminum factory’s investment is an example of how the economic benefits of rising fuel-economy expectations spread across the Midwest and well beyond Detroit.
“People tend to think of these standards and advanced vehicles affecting the big automakers,” says Zoe Lipman, senior manager for transportation solutions at the National Wildlife Federation’s Climate and Energy Program.
“What people tend to forget is that the auto industry is a huge industry that includes hundreds of companies across the country and many dozens, probably hundreds, in the Midwest that make a wide range of components, materials, and electronics, and really are at the heart of rebuilding innovation and competitiveness in the American economy.”
The proposed rules would require makers of cars and light-duty trucks to have an average fleet efficiency of 54.5 mpg by 2025. Automakers are hiring engineers to help meet the challenge, but the push to greater fuel-efficiency also stands to benefit suppliers that make materials and technologies that can help meet the targets.
“Practically every [automaker] in the world has come to us to discuss how our leading technology solutions can help them make their cars stronger, lighter and more fuel efficient,” Alcoa executive vice president Helmut Wieser said in a press release.
Automakers are expected to increase their use of aluminum from 327 pounds per vehicle in 2009 to 550 pounds in 2025, according to a study by Ducker Worldwide.
The new fuel-economy targets wouldn’t kick in until 2017. The U.S. Environmental Protection Agency, in its draft regulatory impact analysis, estimates the policy’s impact on employment at automakers and parts suppliers “to be positive and on the order of a few thousand in the initial years of the program.”