July 24, 2002

Monthly Update to Employees, Customers, Suppliers, and Friends of Kaiser Aluminum:

Once again, here is my monthly summary of restructuring and other matters. The big picture: most of our plants are performing well; some are performing better than we would have expected in this tough economic environment; some of them are performing exceptionally well.   We’re clearly making progress in building a platform for success.  Having said that, I should also note that very difficult market conditions continue to pose challenges for near-term financial performance.

Restructuring Update

On July 12, without objection from any creditor or other party, the court extended the company's exclusive period in which to file a plan of reorganization to December 12, 2002. 

The regularly scheduled Bankruptcy Court hearing on July 23 was busy.  The court ruled on a number of items, the most notable of which include:

  • Approval of Kaiser’s funding of its share of the “business as usual” cash requirements of our non-U.S. subsidiaries and affiliates,
  • Approval of the company’s request to resume metal, energy, and currency hedging activity if and when appropriate,

Due to time limitations, the court was unable to consider our motion to approve a Key Employee Retention Plan. Instead, the court scheduled a hearing on this motion for  September 3.  The next regularly scheduled hearing is on August 27. 

Kaiser Company News

On July 8, we announced the promotion of Pete Bunin to Vice President and General Manager of the Flat-Rolled Products business. We are confident that his leadership, along with the efforts of the entire Trentwood team, will ensure continued excellence in this business.

On July 11, we distributed to all major Kaiser locations a video of my message to employees. We have put the video on the corporate web site (www.kaiseral.com) so that it is accessible to customers, suppliers, and others.  If you’re an employee who has not yet seen the video, please contact your location manager to arrange a viewing.  

While the legal aspects of the Chapter 11 process are important, nothing is more critical than our ability to show how well we can operate. To that end, let me share some recent success stories with you.

  • Gramercy is on schedule for achieving its planned quality, throughput, and cost targets.
  • KJBC operating performance year-to-date is a step-change improvement from that of 2001.
  • Alpart was recently recognized for safety performance by the Jamaica National Mineral Industry.
  • The Valco smelter is operating at an all-time record level of performance as measured by key indicators such as current efficiency and daily pounds produced per cell.
  • Trentwood has achieved 98% on-time delivery so far this year. That’s an all-time record. In combination with excellent quality performance, this record has earned the plant widespread recognition as the industry’s premier supplier of heat-treated sheet and plate products for the aerospace and distribution markets. Trentwood will be able to focus even more sharply on this core business after making the strategic decision to exit the can lid/tab stock business and sell its coating line.
  • The 11 Engineered Products plants are solidifying their industry reputation as Best-in-Class with a record-setting performance pace for quality, delivery, safety, and inventory.
    • EP customer quality performance is on track to set a new record for the 6th consecutive year.
    • EP inventory efficiency is on a pace to set a new record for the 4th time in the past five years.
    • EP delivery performance is currently the 2nd best in its history, and still has the potential to set a new record this year which -- if so -- would be its 5th new record in six years.
    • EP injury rate is on pace for a 2nd consecutive record low.
    • And the new extrusion press installations starting up at Tulsa and Richland are setting new industry benchmarks for quality products.

That’s just a sample of the good things we are doing as a team to maintain positive business momentum. We’ll have more detail on our recent performance when the company reports financial results for the second quarter of 2002 on or about August 15.

Should you have any comments, questions or suggestions, please visit the corporate website.

Jack A. Hockema
President and Chief Executive Officer

Monthly Operating Reports:
June 2002
May 2002
April 2002
March 2002

Update Archive:
June 21, 2002