Wrapped up in aluminum
Shipping 2.5 million metric tons of aluminum every year, Alcoa (formerly Aluminum Company of America) is the world's top producer of aluminum. While a third of the company's profits come from the sale of flat-rolled aluminum sheets to beverage can manufacturers and other packaging companies, Alcoa also produces sheet and plate products used by the railroad, automotive, and aerospace industries. Venturing into the raw materials markets as well, the company has strengthened its presence on the global scene by mining bauxite, an ore from which alumina (the major ingredient of finished aluminum) is extracted. Under the direction of CEO Paul O'Neill, Alcoa operates today through a network of twenty-one largely autonomous business units.
Alcoa began with the discovery of a new inexpensive method of aluminum production in 1886. Chemist Charles Martin Hall, eager to find marketable applications for his discovery, joined with an investor group led by Alfred Hunt; the resulting company was called the Pittsburgh Reduction Company. The company grew dramatically throughout the first half of the twentieth century, in part due to the marketing of products like aluminum foil.
1992 marked a tough time for Alcoa, as the company sold many of its Latin American investments and laid off 2,000 employees due to slumping global prices for aluminum. CEO Paul O'Neill made cutting costs, finding new markets for aluminum, and expanding overseas his top priorities. O'Neill also based the company's future success on improving safety measures. Becoming the industrial safety leader brought prosperity in such fields as productivity, yield, customer satisfaction, and sales growth. In 1993, Alcoa combined its aluminum and chemical operations with Australia's Western Mining Company. Two years later, Alcoa teamed with Audi to build the world's first aluminum framed car, the Audi A8, as more and more car companies are now turning to aluminum for their vehicals.
The company is now firmly on the upswing. The rapid integration of Inespal and Alumax helped Alcoa achieve record revenues of $15.3 billion in 1998. With aluminum prices still anemic Alcoa's performance is all the more impressive to analysts. Now Chairman, O'Neill also hopes cost cutting and improved productivity will save the company $1.1. billion by the end of 2000. The Alcoa Business System, based on Toyota's production methods, should also help savings by allowing Alcoa to operate in real time.
Following its belief that expansion is necessary to survive, in March 1999, Alcoa made an unsolicited bid to take over its rival Reynolds Metals. Reynolds rejected this bid and an ensuing August bid as too low. In August 1999 Alcoa put the pressure on Reynolds both by making a cash tender offer of $65 a share ($4.1 billion) and by attempting to oust Reynolds's board of directors. One week later Reynolds capitulated to Alcoa in a stock deal worth $69 per share and a total of $4.6 billion. The new company now employs 125,000 people and has sales of $21 billion. The Reynolds company eventually assumes the Alcoa name, but the enlarged Alcoa will continue to market name brands such as Reynolds Wrap. Under the terms of a consent decree entered into with the Department of Justice and an undertaking agreed with the European Union, Alcoa said, it will sell a 25 percent interest in Reynolds' Longview, Wash., aluminum smelter, as well as Reynolds' interest in three alumina refineries: Worsley, Australia (which is 56 owned by Reynolds); Stade, Germany (50 percent owned); and Sherwin, Texas (100 percent owned).
The Reynolds acquisition was in response to the merger of Switzerland's Alusuisse Group and Canada's Alcan Aluminum. The deal would have created the world's largest aluminum company if Alcoa had not acted as fast as it did. To ensure its size and position, Alcoa also acquired Cordant Technologies a few months later to boost revenue to $23.5 billion and 143,000 employees.
With twenty-four separate businesses worldwide, Alcoa's recruiting process is anything but centralized. One can, however, mail a resume to the corporate headquarters in Pittsburgh. Keep and eye out for college recruiters and give the Human Resources department a call in order to find out information regarding current job openings.
Employees report that life at ALCOA is largely "divided between those who are hanging onto the 'job for life' mentality, and those who are very entrepreneurial and have a 'gunslinger' attitude toward the whole employment scene." The company offers some compelling perks. One enthusiastic employee reports that ALCOA "paid the entire cost of my Master's degree including travel and time off." The company seeks new hires from a variety of backgrounds, but some caution that "humanities majors sometimes have a tough time." When asked how the company treats women and minorities, employees respond that "the higher you go in the organization, the better it gets." Employees give the pay fairly high marks, and report that attire around the office is usually "business casual."
Robert F. Slagle
Aluminum products for industrial and commercial markets;Ceramics;Homebuilding products
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