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E-commerce is Transforming Alcan's Automotive Business

8 May 2000

E-commerce is Transforming Alcan's Automotive Business

    CHICAGO--May 8, 2000--Alcan Aluminium Limited predicts that up to 90 percent of its automotive business will be conducted by e-commerce within the next two years, Donald W. Macmillan, president of Alcan Global Automotive Products, said here today.
    Macmillan announced that Alcan has established an e-commerce task force to aggressively support the e-commerce and Internet initiatives of its major automotive customers.
    "Business-to-business electronic commerce is taking the auto industry by storm," the Alcan executive noted. "General Motors, for example, has indicated that nearly 70 percent of its aluminum purchases will be made on-line by the end of the year."
    Macmillan, who spoke at a Monday session of the METAL BULLETIN Conference in Chicago, pointed out that Ford Motor Company's President and CEO Jacques Nasser has said that the Internet is transforming every aspect of Ford and the auto industry, and GM President Rick Wagoner has described e-commerce as "the biggest force in business today."
    DaimlerChrysler, Ford and General Motors recently announced the establishment of a global purchasing exchange that will create the world's largest virtual marketplace.
    Macmillan, who also chairs the Aluminum Association's Automotive and Light Truck Group, noted that the transportation sector is today's largest and fastest growing aluminum market and is attracting the greatest share of the aluminum industry's attention and technology investments.
    Macmillan said Alcan is using the term "Alumineering" to refer to its unique, leadership approach to Alcan's rapidly growing automotive business.
    "Alumineering provides Alcan customers with proprietary technologies for high-volume aluminum structures and body panels that have the strength and stiffness of steel at half the weight," he said. "These are technologies that are adaptable and compatible with existing high-volume production methods.
    "Alcan's Alumineering solutions deliver value far beyond any price-per-pound comparison. By reducing vehicle mass without reducing size, Alumineering helps create the 'weight space' that enables our customers to meet weight-reduction targets, while still delivering on consumer demands for large, safe vehicles with weight-adding options such as power seats, CD players and on-board Internet services."
    "Forty years ago, the average North American vehicle contained only 50 pounds of aluminum, " he said. "Today that amount has grown five times to 250 pounds, and we expect it to top 350 pounds by 2005."
    Aluminum's growing popularity with automakers and their customers is the result of a variety of factors, including:

    -- Performance - Lighter, aluminum-intensive vehicles
    accelerate more quickly and handle better, and offer
    improved NVH (noise, vibration and harshness)
    characteristics.

    -- Recyclability - Aluminum is 100 percent recyclable and
    economical to recycle. Moreover, aluminum scrap retains a
    high value.

    -- Fuel Efficiency - Every 10 percent reduction in vehicle mass
    provides a six to eight percent improvement in fuel economy.

    -- Reduced Emissions - Every ton of aluminum that replaces
    steel in today's vehicles eliminates 20 tons of greenhouse
    emissions over the average life of a vehicle.

    -- Safety - Aluminum absorbs the same amount of crash energy as
    steel at little more than half the weight. Lighter cars also
    are more maneuverable and brake faster.

    Macmillan said that Alcan is working closely with the auto industry to develop safe, more fuel-efficient vehicles through the use of aluminum.
    "Aluminum has made significant contributions toward helping North American automakers develop fuel-efficient cars of tomorrow under the banner of the Partnership for a New Generation of Vehicles (PNGV) - a joint initiative of automakers and the U.S. government," he said. "The three concept vehicles that have resulted from this program all feature extensive use of aluminum as a key enabling technology."
    He added that Alcan expects to see a number of mass-produced, highly successful aluminum-intensive vehicles on the road both in Europe and North American within the next five years.