Alcoa

Alcoa, Inc.
	File:Alcoa.jpg
Company type	Public (NYSE: AA)
Industry	Aluminum
Founded	1886 in Pittsburgh, Pennsylvania
Headquarters	Principal: New York, NY; Operational: Pittsburgh, PA
Key people	Alain Belda (CEO and Chairman)
Products	building products; fastenings; castings; aluminum foil; automobile parts; rolled aluminum; milled aluminum
Revenue	US$30.4 billion (2006) [1]
Net income	US$2.248 billion (2006) [2]
Total assets	37,400,000,000 Canadian dollar (2014)
Number of employees	129,000 (2006)
Website	http://www.alcoa.com

Alcoa (NYSE: AA) is the world’s second largest producer of aluminum, behind Rusal after a Russian controlled merger. Alcoa leads the world in alumina production and capacity. From its operational headquarters in Pittsburgh, Pennsylvania, Alcoa oversees operations in 43 countries. It is followed closely by a former subsidiary, Alcan, a Canadian-based company in Montreal, who is the third-leading producer behind Alcoa, but in terms of sales Alcan is ahead of Alcoa. Alcoa made a hostile $27 billion bid for Alcan on May 7th, 2007, aiming to reunite the two companies and form the largest aluminum producer in the world. The takeover bid is expected to be politically contentious.

In addition to aluminum products, Alcoa also makes and markets consumer brands including Reynolds Wrap foil and plastic wrap, Baco household wraps, and Alcoa wheels. Among Alcoa’s other businesses are vinyl siding, closures, fastening systems, precision castings, and electrical distribution systems for cars.^[1] The packaging unit, including the Reynolds Metals subsidiary, is expected to be spun off to satisfy antitrust regulators, in response to the proposed Alcan takeover.

History

In 1886, Charles Martin Hall, a graduate of Ohio’s Oberlin College, discovered the process of smelting aluminium, almost simultaneously with Paul Héroult in France. He realized that by passing an electrical current through a bath of cryolite and aluminum oxide, the then semi-rare metal aluminum remained as a byproduct. This discovery, now called the Hall-Héroult process, is still used by Alcoa to produce aluminum. With the help of financial backers, Hall started the Pittsburgh Reduction Company, which changed its name to Aluminum Company of America in 1907. The acronym "Alcoa" was coined in 1910, given as a name to two of the locales where major corporate facilities were located (although one of these has since been changed), and in 1999 was adopted as the official corporate name.

Until 1950, Alcoa was concerned with its domestic market, while its Canadian subsidiary Aluminum Limited (Alcan) took care of the international markets. From 1937 to 1957 it was under stricter than normal governmental supervsion, pending a final verdict in the U.S. vs Alcoa antitrust case. Alcoa's monopoly was effectively ended by the disposal of Defense Corporation Plants after WWII by the War Assets Administration. This enabled Reynolds Metals Company and Kaiser Chemicals to become fully integrated producers of primary aluminum. They were soon joined by Anaconda Aluminum Company, a subsidiary of the copper-industry giant. In 1958 Harvey Machine Tools Company began primary aluminum production, marking the end of Alcoa's monopoly over the process which had led to its domination of the American market.

Noted economist and former Federal Reserve chairman Alan Greenspan criticized the judgment of monopoly against Alcoa (Capitalism: The Unknown Ideal; see^[2]) quotes Learned Hand, the judge in U.S. v Alcoa, who remarked, "It was not inevitable that it should always anticipate increases in the demand for ingot and be prepared to supply them. Nothing compelled it to keep doubling and redoubling its capacity before others entered the field. It insists that it never excluded competitors; but we can think of no more effective exclusion than progressively to embrace each new opportunity as it opened, and to face every newcomer with new capacity already geared into a great organization, having the advantage of experience, trade connections and the elite of personnel." Greenspan believes that the characterization of Alcoa as a threat to competition is erroneous, as "ALCOA is being condemned for being too successful, too efficient, and too good a competitor. Whatever damage the antitrust laws may have done to our economy, whatever distortions of the structure of the nation's capital they may have created, these are less disastrous than the fact that the effective purpose, the hidden intent, and the actual practice of the antitrust laws in the United States have led to the condemnation of the productive and efficient members of our society because they are productive and efficient." Greenspan grants that Alcoa was a monopoly, but maintains that it was not a coercive monopoly and, hence, should not have been subject to anti-trust action.

Alcoa has established an 8% stake in China’s state-run aluminum industry and has formed a strategic alliance with Aluminium Corporation of China (Chalco), China’s largest aluminum producer, at its Pingguo facility.

Alcoa has also acquired two facilities in Russia, at Samara and Belaya Kalitva. Alcoa recently launched an offer to purchase the remaining 18% of the Belaya Kalitva plant from minority shareholders, giving it complete ownership in the facility.

In 2004, Alcoa's specialty chemicals division was sold, taking on the name Almatis, Inc..

In 2005, under heavy criticism by local and international NGOs related to a controversial dam project exclusively dedicated to supplying electricity to this smelter, Alcoa began construction in Iceland on Alcoa Fjardaal, a state-of-the-art aluminum smelter and the company’s first greenfield smelter in more than 20 years. Alcoa also signed a memorandum of understanding with the government of the Republic of Trinidad and Tobago to build a low-emissions aluminum smelter and related facilities there. However, there has been strong objection of this by the residents of the area of the proposed smelter sparking protests and marches frequently.Also, Alcoa is working with the government of Ghana on the development of the aluminum industry in that country. Furthermore, Alcoa has completed or is undergoing primary aluminium expansion projects in Brazil, Jamaica, and Pinjarra, Western Australia.

In 2006, Alcoa relocated its top executives from its headquarters in Pittsburgh to New York City. Although the company's principal office is located in New York City, the company's operational headquarters are still located at its Corporate Center in Pittsburgh. Alcoa employs approximately 2,000 people at its Corporate Center in Pittsburgh and 60 at its principal office in New York. [3]

Alcoa was named one of the top three most sustainable corporations in the world at the World Economic Forum in Davos, Switzerland.

Alcoa in Ghana

Alcoa's affiliate in Ghana, the Volta Aluminum Company, was completely closed between May 2003 and early 2006, due to problems with its electricity supply. [4] [5]

Alcoa in Iceland

By the middle of September, over 50% of the Alcoa Fjardaál smelter construction in Iceland has been finished. The total workforce on site is 1,750 people, of which 80% are of Polish origin. It is expected to be on line by 2007. Alcoa and the government of Iceland have signed an agreement on instigating a thorough feasibility study for a new 250,000 tpy smelter in Bakki by Húsavík in Northern Iceland. In order to power Alcoa's new smelters in Iceland, vast tracts of otherwise untouched wilderness are being flooded to provide hydroelectric energy.

Alcoa In South Wales (Swansea)

On November 21 2006, Alcoa announced that it is to close its Waunarlwydd works in Swansea, with the loss of 298 jobs. Production ceased at the Swansea plant on 27 January 2007. Decommissioning works are now taking place. Although rolling operations at the plant have now ceased, a small workforce is still employed in homogenisation, where heat treatment takes place for the Kitts Green plant.

Alcoa in Australia

Alcoa operates bauxite mines, alumina refineries and aluminum smelters through Alcoa World Alumina and Chemicals, which is a joint venture between Alumina Limited and Alcoa. Alcoa World Alumina and Chemicals owns and operates three alumina refineries in Australia: Kwinana, Pinjarra and Wagerup. All three of these assets are located in Western Australia. Alcoa operates two bauxite mines in Western Australia. They are the Huntly and Willowdale mines.

Alcoa in Alcoa

ALCOA was lured into Blount County, Tennessee and created a plant just outside of Maryville, TN. This plant was the biggest provider of aluminum in the South. The area needed housing for workers, so ALCOA built many houses. The area eventually turned into a city and decided to name its self after the the Aluminum Co. Alcoa, TN was founded 1919.^{[citation needed]}

Alcoa World Alumina and Chemicals

Alcoa owns and operates the majority of it's Alumina Refineries and Aluminum Smelters through it's 60% share of Alcoa World Alumina and Chemicals.

References

External links

[1] Alcoa Website/About Alcoa

[2] Antitrust by Alan Greenspan

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