Alcoa is in the news at the state and national levels.
The state of North Carolina is trying to muscle its way into ownership of four hydroelectric dams the company built and has owned for more than half a century. This unseemly grab has the support of public officials of both parties, those on the local level in Stanly and surrounding counties, in the legislature and the Governor’s Office. The reasoning is that the state approved the building of the dams on the Yadkin River because of the jobs Alcoa brought with the smelting plant that was fueled by the electricity from the dams. Now that the smelting plant has closed and the jobs are gone, state and local officials say, they want the dams and the land.
A bit of history here. Alcoa built the dams because no power company in North Carolina would do it. So ask yourself, if Duke Power or Progress Energy or whomever had agreed to build the dams to power the smelting plant 50 years ago, and if the smelting plant later closed, would the state and local vultures be demanding that Duke or Progress hand them the dams and the land they occupy? Hardly.
A committee is meeting this morning in the legislature to hash this out. Indications are that some state officials at least are seeing this as a sticky problem and might back off.
Meanwhile, Alcoa is in the national news today because it’s the first of the Dow Jones Industrials to report earnings, and they were down:
Alcoa Inc, whose results are traditionally viewed as an indicator of the country’s economic health, is expected to post a third consecutive quarterly loss this week.
But many on Wall Street no longer see the aluminum producer’s numbers as a bellwether portending either a deeper recession or an easing of the global downturn.
“It’s a large company in a major industry and it is the first to report, so it gets special recognition,” said Joseph Battipaglia, a market strategist at Stifel Nicolaus & Co in Yardley, Pennsylvania.
“But it’s only telling you about the health of the aluminum industry and that’s not very good right now.
Want a better indicator of the health of the economy? Battipaglia has a suggestion:
“FedEx and UPS are better signs of a change in direction,” he added, referring to the two largest U.S. shipping or package-delivery companies. “I wouldn’t take what Alcoa says as a significant indication of how the American or global economy is faring.”
