Alcoa chief sees slow recovery for U.S. companies-CNBC

NEW YORK, July 27 - U.S. manufacturers are showing signs of coming back from the economic downturn, but recovery will take time, the chief executive of aluminum producer Alcoa Inc said on Monday. Klaus Kleinfeld said in an interview with cable TV business channel CNBC that aluminum inventory levels were very low since demand from manufacturers dried up in the recession. "I think it will take a while for some companies to recover," he said. "They have all played the game of selling off their inventories. "But they sold them down to a level that is not maintainable and that's the reason why I believe we are seeing this uptick in the U.S." Kleinfeld said since the economic downturn late last year, the aluminum price tumbled from over $3,400 per tonne to $1,400. Manufacturers were not buying the metal and Alcoa was forced to cut back on production to manage supply. "We have inventory levels pretty much all across the industries that are so low we've never seen before," he said. "In our industry we had a freefall - a 60 percent price decline in five months." But now, "we see that China has come back, it's actually started to roll nicely again. The U.S. has clearly bottomed out and we even see some signs of uptick here." Asked where he saw signs of a rebound, Kleinfeld pointed to the auto industry. "Both Ford and Toyota <7203.T> have announced that they will revamp production for their most popular models in the second half of this year," he said. Also, the "Cash for Clunkers" program in which motorists can trade in old cars for more fuel efficient models was likely to increase auto production. "Everyone pretty much assumes that's going to mean another 250,000 cars for the U.S. though it's obviously back-end loaded to the end of this year," said Kleinfeld. "Even on the Class A truck side, demand level has gone up 10 percent so that's pretty good," he said.