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Arconic

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Arconic Corporation
Company typePrivate
IndustryManufacturing
FoundedApril 1, 2020; 4 years ago (2020-04-01) in Pittsburgh, Pennsylvania[1]
Headquarters
Pittsburgh, Pennsylvania[2]
,
U.S.
Key people
Chris Ayers (CEO)
RevenueIncrease US$8.96 billion[3] (2022)
Increase US$−47 million[3] (2022)
Increase US$−182 million[3] (2022)
Total assetsDecrease US$6.02 billion[3] (2022)
Total equityDecrease US$1.36 billion[3] (2022)
OwnerApollo Global Management (2023–present)
Number of employees
11,550 (2022)[3]
Websitearconic.com

Arconic Corporation is an American industrial company specializing in lightweight metals engineering and manufacturing. Its products are used worldwide in aerospace, automotive, packaging, oil and gas, building and construction,[4] defense, commercial transportation, consumer electronics, and industrial applications.

The business today known as Arconic was originally part of Alcoa Inc. The name Arconic was first used in 2016 when Alcoa Inc. was separated into two companies, Alcoa Corporation and Arconic Inc. Arconic Inc. was further separated in 2020 into Howmet Aerospace Inc., focused on engineered products, and Arconic Corporation, focused on rolled aluminium products. On August 18, 2023, private equity firm Apollo Global Management completed the acquisition of Arconic.[5]

In 2024, the official inquiry into the 2017 Grenfell Tower fire in London, which killed 72 people, identified Arconic cladding as "by far the largest contributor" to the disaster. The company was found to have deliberately concealed the known fire risks, an accusation which Arconic has denied.

History

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Corporate development

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On November 1, 2016, Alcoa Inc. spun off its bauxite, alumina, and aluminium operations to a new company called Alcoa Corp.[6][7][8][9][10][11] After that, Alcoa Inc. was renamed Arconic Inc., keeping operations in aluminium rolling (excluding the Warrick operations), aluminium plate, precision castings, and aerospace and industrial fasteners.[9][10][11][12][13]

Klaus Kleinfeld, Arconic's CEO at the time of the Alcoa split, stepped down in April 2017. Arconic's board said he had displayed poor judgment in unauthorised interactions with activist shareholder Elliott Management[14][15] (he sent a letter to Elliott founder Paul Singer making threatening insinuations about an incident involving "a Native American feather headdress and a rendition of 'Singin’ in the Rain' performed in a fountain" during a trip to the 2006 World Cup).[16][17] After what the New York Times called a "Bruising and Public Dispute", Elliott was subsequently given three seats on Arconic's main board.[18]

The company focuses on turning aluminium and other lightweight metals into engineered products such as turbine blades for sectors including aerospace and automotive.[19][20][21] It traded on the New York Stock Exchange under the ARNC ticker.[22][23][24]

In July 2018, Arconic announced a two-year joint development agreement with aerospace manufacturer Lockheed Martin, focused on technologies like metal 3D printing to produce new lightweight structures and systems,[25] and a new long-term contract to supply aluminium products to Boeing.[26]

On February 6, 2019, Arconic replaced CEO Chip Blankenship. His departure came two weeks after Arconic announced it was backed out of a sale to Apollo Global Management, a decision that sent Arconic shares tumbling,[27] and put pressure on Arconic to make internal improvements.[15] Two days later, on February 8, 2019, Arconic Inc. announced that it would split into two separate businesses.[28] Arconic Inc. would be renamed Howmet Aerospace Inc. and a new company, Arconic Corporation, would be set up and spun out tax free from Arconic Inc.[29] The new Arconic Corporation would be focused on rolled aluminium products and Howmet Aerospace on engineered products.[30] The separation was completed effective April 1, 2020.[1][31]

In April 2020, during the global COVID-19 pandemic, Arconic announced actions to mitigate the impacts of the disease, including director, senior manager and salaried employee pay cuts, restructuring of the salaried workforce, temporary closure of facilities in Tennessee and New York and decreased production at other US facilities, and similar measures at rolling mill facilities in Europe, China and Russia.[32]

In November 2022, to comply with sanctions on Moscow over the Russian invasion of Ukraine, Arconic sold its operations in Russia to the owner of state-backed metals company VSMPO-AVISMA for $230 million.[33][34]

In May 2023, Apollo Global Management agreed to acquire Arconic in an all-cash deal worth $5.2 billion, including debt.[35] The purchase was completed in August 2023,[5] when Chris Ayers was named as the new CEO of Arconic from September 11, 2023.[36]

In January 2024, Arconic announced it was selling its China-based manufacturing operations in Qinhuangdao and Kunshan, employing about 860 people, in a deal worth up to $300 million. The China business was said to be subscale in comparison to other parts of Arconic, and had no sensitive intellectual property.[37]

Grenfell Tower fire

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Experts at the official inquiry into the 2017 Grenfell Tower fire in London identified Arconic's Reynobond PE rainscreen cladding as "by far the largest contributor" to the disaster, which had resulted in 72 deaths. The cladding had been installed on the residential tower block as part of a refurbishment in 2016. In November 2020, four France-based Arconic employees refused to give evidence to the inquiry, saying they might breach a 1968 French law preventing evidence being given to proceedings abroad.[38] In January 2021, the building safety minister Lord Greenhalgh accused them of hiding behind the 1968 French blocking statute. The French embassy in London confirmed the statute did not apply to the Grenfell Inquiry,[39] and in February 2021 Arconic president Claude Schmidt finally agreed to testify.[40] He told the inquiry it was not his "priority" to understand UK fire safety processes,[41] denied concealing failed fire safety tests of Arconic's aluminium composite material product,[42] but agreed that Arconic's failure to notify the UK regulator, the British Board of Agrément, about the tests was a "misleading half truth".[43]

The inquiry report, published in September 2024, found that the Arconic cladding in the form used at Grenfell Tower was "extremely dangerous". It noted that Arconic was aware of this, having commissioned fire tests on the product, but had since 2005 "deliberately concealed from the market the true extent of the danger".[44] According to the inquiry report, the company aimed to exploit what it saw as regulatory weaknesses in countries such as the UK and it concluded that "Arconic ... promoted and sold a product knowing that it presented a significant danger to those who might use any buildings in which it was used."[45] In a statement, Arconic's French business Arconic Architectural Products rejected that it had "sold an unsafe product", concealed information or misled any certification body, customer, or the public.[46]

Discrimination suit

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In May 2022, a former Arconic employee Daniel Snyder filed a federal lawsuit against the company alleging religious discrimination. Snyder lost his job at Arconic's Riverdale plant in June 2021 after publicly posting on the company's intranet an objection to the company using a rainbow to promote Gay Pride Month.[47][48] Supported by the Thomas More Society,[49] the case was referred to the United States Court of Appeals for the Eighth Circuit in April 2024.[50] In August 2024, Snyder's appeal was dismissed.[51]

References

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  1. ^ a b "Arconic Inc. Board of Directors Approves Separation of Company". WSJ. Archived from the original on 2020-04-10. Retrieved 2020-03-31.
  2. ^ "Arconic Inc. Current Report, Form 8-K, Filing Date May 17, 2019". SEC.gov. Retrieved June 24, 2019.
  3. ^ a b c d e f "2022 Annual Report (Form 10-K)". SEC. 21 February 2023.
  4. ^ Kirkpatrick, David D. (June 19, 2017). "U.K. Officials Said Material on Tower Was Banned. It Wasn't. - The New York Times". The New York Times. Retrieved June 22, 2017. The material in the exterior cladding consisted of insulation sandwiched between two sheets of aluminum. The type used at Grenfell Tower is made under the Reynobond name by Arconic, a company spun off from the aluminum giant Alcoa last year.
  5. ^ a b "Arconic Completes Transaction with Apollo Funds". Arconic. Retrieved 2023-08-26.
  6. ^ DIETZ, MARGREET. "While you were sleeping: UPDATED Oil report lifts US stocks". NBR. NBR. Archived from the original on 23 April 2016. Retrieved 18 April 2016.
  7. ^ Stevenson, Abigail. "Cramer Remix: A surprising outlook for earnings". CNBC. CNBC. Retrieved 18 April 2016.
  8. ^ Deaux, Joe. "One Down, Two to Go for Alcoa as S&P Signals No Junk for Arconic". Bloomberg. Bloomberg. Retrieved 25 September 2016.
  9. ^ a b "Alcoa Inc. Board of Directors Approves Separation of Company". Alcoa. Alcoa Inc. Retrieved 28 May 2018.
  10. ^ a b "Arconic sells 60 percent stake in Alcoa for $890 million". Reuters. 15 February 2017. Retrieved 28 May 2018.
  11. ^ a b Morgenson, Gretchen (19 May 2017). "Dubious Corporate Practices Get a Rubber Stamp From Big Investors". The New York Times. Retrieved 28 May 2018.
  12. ^ MILLER, JOHN W. "Alcoa Spinoff Arconic to Focus on Aerospace, Auto". Wall Street Journal. Wall Street Journal. Retrieved 18 April 2016.
  13. ^ Hall, Jason (16 September 2016). "Alcoa Inc Takes Steps Forward in Plans to Split". The Motley Fool. The Motley Fool. Retrieved 25 September 2016.
  14. ^ de la Merced, Michael (17 April 2017). "Arconic C.E.O. Ousted After Sending Unauthorized Letter to Hedge Fund". New York Times. Retrieved 12 September 2024.
  15. ^ a b "Arconic Replaces CEO Again, Extending Tumult Since Split From Alcoa". Industry Week. Bloomberg. 6 February 2019. Retrieved 12 September 2024.
  16. ^ de la Merced, Michael (20 April 2017). "Before Ouster, Arconic C.E.O. Accused Hedge Fund Founder of Wild Antics". New York Times. Retrieved 12 September 2024.
  17. ^ Purtill, Corinne (21 April 2017). "The letter that got Klaus Kleinfeld fired as CEO of Arconic". Quartz. Retrieved 12 September 2024.
  18. ^ de la Merced, Michael (22 May 2017). "Arconic Settles With Elliott After Bruising and Public Dispute". New York Times. Retrieved 12 September 2024.
  19. ^ Kinahan, JJ. "Alcoa Results Forecast to Drop Ahead of Company Split". Forbes. Retrieved 18 April 2016.
  20. ^ Denning, Liam. "Alcoa's Long Division Problem". Bloomberg. Bloomberg. Retrieved 18 April 2016.
  21. ^ Deaux, Joe. "Alcoa Processing Unit to Be Named 'Arconic' After Split". Bloomberg. Bloomberg. Retrieved 18 April 2016.
  22. ^ Mekeel, Tim. "Alcoa spinoff to be named Arconic, to include Manheim Pike plant". LancasterOnline. LancasterOnline. Retrieved 18 April 2016.
  23. ^ Boselovic, Len. "New Alcoa company christened Arconic". Pittsburgh Post-Gazette. Pittsburgh Post-Gazette. Retrieved 18 April 2016.
  24. ^ Hackett, Robert. "Meet Arconic: Alcoa's Spinoff Aerospace and Auto Firm". Fortune. Fortune. Retrieved 18 April 2016.
  25. ^ Davies, Sam (16 July 2018). "Arconic and Lockheed Martin extend partnership to focus on customised material and manufacturing processes". TCT Mag. Retrieved 12 September 2024.
  26. ^ Toto, Deanne (16 July 2018). "Arconic expands contract with Boeing". Recycling Today. Retrieved 12 September 2024.
  27. ^ Garber, Jonathan (22 January 2019). "Arconic crashes 25% after its board says it's no longer considering a sale". Business Insider. Retrieved 12 September 2024.
  28. ^ Cornell, Joe. "Arconic To Split Into Two Separate Companies". Forbes. Retrieved 2020-03-03.
  29. ^ "Arconic Consider Job Cuts Due to Boeing 737 MAX Production Halt". WSJ. Jan 27, 2020. Retrieved April 10, 2020.
  30. ^ Mericle, Julia (August 2, 2019). "Arconic is splitting into two: Here's what the new companies will be named". Pittsburgh Business Times. Retrieved October 17, 2020.
  31. ^ "Arconic completes split into two companies". www.bizjournals.com. Retrieved 2020-04-07.
  32. ^ Bloxsome, Nadine (8 April 2020). "Arconic announces $200 Million of actions to mitigate COVID-19 impact". Aluminium International Today. Retrieved 12 September 2024.
  33. ^ "Arconic Corp sells its Russian operations for $230 million". Reuters. 15 November 2022. Retrieved 12 September 2024.
  34. ^ "Aluminium products maker Arconic offloads Russian operations for $230m". Mining Technology. 16 November 2024. Retrieved 12 September 2024.
  35. ^ "Pittsburgh-based Arconic agrees to be acquired by private equity firm". Pittsburgh Post-Gazette. 4 May 2023.
  36. ^ Taylor, Brian (29 August 2023). "Arconic completes Apollo transition, names new CEO". www.recyclingtoday.com. Retrieved 2024-09-12.
  37. ^ Wu, Kane; Liu, Roxanne; Roumeliotis, Greg (24 January 2024). "Apollo-backed aerospace supplier Arconic to sell China business in $300 mln deal- sources". Reuters. Retrieved 12 September 2024.
  38. ^ Symonds, Tom (5 November 2022). "Grenfell Tower inquiry: Cladding firm employees refuse to give evidence". BBC News. Retrieved 11 September 2024.
  39. ^ Baker, Nathaniel (5 January 2021). "Minister tells Arconic bosses to 'step up' and appear before Grenfell Inquiry". Inside Housing. Retrieved 11 September 2024.
  40. ^ Kirk, Tristan (9 February 2021). "Grenfell inquiry: Cladding firm witnesses branded 'unreasonable' for refusal to give evidence". Evening Standard. Retrieved 11 September 2024.
  41. ^ Symonds, Tom (16 February 2021). "Grenfell: Arconic boss says fire safety tests were not his 'priority'". BBC News. Retrieved 11 September 2024.
  42. ^ Price, David (18 February 2021). "Grenfell: Arconic boss denies concealing 'disastrous' test results". Construction News. Retrieved 11 September 2024.
  43. ^ Lowe, Tom (22 February 2021). "Grenfell Inquiry: What we learnt from Arconic last week". Housing Today. Retrieved 11 September 2024.
  44. ^ Symonds, Tom (4 September 2024). "Grenfell's path to disaster: How chain of failures and 'systematic dishonesty' led to 72 deaths". BBC News. Retrieved 4 September 2024.
  45. ^ Booth, Robert (4 September 2024). "Who are the key players named in the Grenfell Tower report?". The Guardian. Retrieved 4 September 2024.
  46. ^ Lowe, Tom (4 September 2024). "Product manufacturers come out fighting after Grenfell Inquiry's damning verdict". Building. Retrieved 4 September 2024.
  47. ^ Kauffmann, Clark (8 June 2022). "Iowan sues after being fired for calling gay pride 'an abomination to God'". Des Moines Register. Retrieved 12 September 2024.
  48. ^ "Terminated employee files appeal in Arconic lawsuit". Our Quad Cities News. 22 November 2022. Retrieved 12 September 2024.
  49. ^ "Snyder v. Arconic: Fired for Believing What the Bible Teaches (December 14, 2023)". Thomas More Society. Retrieved 12 September 2024.
  50. ^ Cook, Linda (8 April 2024). "Arconic discrimination lawsuit continues in appeals court". Our Quad Cities News. Retrieved 12 September 2024.
  51. ^ Morris, William (14 August 2024). "Fired for anti-gay online posting, Riverdale man loses religious discrimination lawsuit". Des Moines Register. Retrieved 12 September 2024.
[edit]
  • Official website
  • Business data for Arconic:
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