Alcoa's 125 Years
Before Alcoa (1855-1884)
1855The Emperor and his toys
Aluminum was discovered early in the 1800s and by the middle of that century, crude methods were available for extracting it. However, in 1852, at $545 a pound, it was a precious metal that only the truly wealthy could afford. Napoleon III had a baby rattle and other small objects made of aluminum. The metal was so rare and unique that in 1855 small bars of aluminum were exhibited at the Paris Exhibition alongside the crown jewels of France.
During the construction of the Washington Monument, aluminum was cast into a nine inch high pyramid which was to be placed atop the obelisk as an ornament and lightening rod. Made before Alcoa, without the Hall process, this aluminum cap cost $225, which would be roughly $4,000 today. It weighed 100 ounces, which works out to $640 a pound. Before its installation the cap was on display on the floor at Tiffany's in New York City, where customers were invited to "step over the top of the Washington Monument."
More information about the Washington Monument at The Minerals, Metals, and Mines society
The spark of innovation (1886-1920)
1886Bright shiny dawn
Alcoa's story begins with Charles Martin Hall, a college student who had a vision of finding a commercially feasible process for extracting aluminum. Hall knew that if he could discover this process, he could turn it into an industry. Charles Martin Hall was born in 1863, the third son and sixth child of a Congregational minister. He was a studious child, whose favorite boyhood reading was an old and torn college chemistry book that belonged to his father. By the age of 12, he was performing chemical experiments at home. When Hall later attended Oberlin College, although it was a liberal arts school, he studied chemistry, which had been his passion since boyhood.
Charles was interested in finding a way to make aluminum throughout his college days. Charles' chemistry professor, Frank Fanning Jewett, told his class that "fame and fortune awaited the man who would find an inexpensive way to separate the metal" from bauxite ore. After graduating from college, Charles decided to pursue his aluminum goal seriously and he began to conduct experiments in what the Hall biographer Junius Edwards dubbed, "the immortal woodshed". The woodshed was really a summer kitchen attached to the back of the Hall home.
Charles' sister Julia Brainerd Hall was his close friend and advisor. Some have said that Julia may have had more of hand in the invention than the record reveals. It is certain that she served as his assistant and was an excellent sounding board since she had also studied chemistry at Oberlin, which was quite unusual for a woman in that day. Her biggest contribution may have been that she was responsible for the meticulous records of Hall's experiments. These records were later used to prove the priority of Hall's invention, and without them, there would have been no patent, and no Alcoa.
Hall thought that if he could find a water free liquid which would dissolve aluminum oxide, he might be able to separate the metal by electrolysis. On February 10, 1886 he discovered that cryolite (a sodium aluminum fluoride) in its molten state would dissolve aluminum oxide. On February 16 he passed an electric current through the crucible, yet no aluminum was found. Hall reasoned that the problem was with the clay crucible, not with his process. He lined the crucible with carbon and tried again. A direct electric current was passed through the molten cryolite-alumina solution for several hours. When the mixture cooled and was broken up there were his first small, shining globules of aluminum. The globules from this discovery are referred to as Alcoa's "crown jewels." It was February 23, 1886. Hall was just 22 years old.
Read more about Charles Martin Hall
Tour Hall's homestead
Watch a short feature film that tells the Alcoa story (1940)
Read Hall's description of his experiments in a speech he gave upon accepting the Perkin Medal in 1911.
1888Alcoa is born
Charles started seeking financial backing to commercialize his process. His older brother George, who lived in New England, suggested that he come to Boston. Nothing developed there. His precious globules were looked upon as laboratory curiosities.
After returning to Oberlin, Charles sought assistance from Alfred and Eugene Cowles, of Cowles Electric Smelting & Aluminum Company, which made alloys. They were already running a successful business having done much to develop the electric furnace. The Cowles brothers made an offer where Charles would work on the process for them for 90 days, with an option to buy the process and patents and make Charles a partner. They weren’t interested, so the Cowles brothers did not exercise their option, and at the end of six months, Charles was back where he started.
Through his association with the Cowles brothers, Hall met Romaine C. Cole, a young businessman who recognized the value of Hall's invention and recommended contacting Capt. Alfred E. Hunt, one of the foremost metallurgists in the steel industry, located in Pittsburgh, Pennsylvania. Cole knew Hunt through some experimental work on aluminum that Cole had done for Hunt & Clapp's materials testing business.
Hunt was so impressed with Hall's process that he called a preliminary meeting of five of his associates on July 31, 1888. The meeting was held at Hunt's Pittsburgh home and the first order of business was to select a name for the new company. The first name selected for the business was Pittsburgh Aluminium Company.
Hunt was originally from Boston and was only 33 years old at the time. The others Hunt gathered were also relatively young, all under 35 years old and all connected with the steel industry. In addition to Hunt's partner George H. Clapp, the others were Howard Lash, head of the Carbon Steel Company. Millard Hunsiker, sales manager for Carbon Steel. Robert Scott, superintendent of the 33rd Street Mill of Carnegie Steel, and W. S. Sample, chief chemist for Hunt and Clapp's Pittsburgh Testing Laboratory.
On August 8, 1888 they agreed to put up $20,000, $5,000 at a time, on call, to build a pilot plant which was constructed on Smallman Street. From then on Hunt left the materials testing business in the hands of his partner Clapp and spent the remainder of his career with Alcoa.
On October 1, 1888, the enterprise was incorporated as The Pittsburgh Reduction Company. The name proved to be an unhappy choice, as it was often confused with another, similarly titled garbage disposal concern. In 1907 the name was changed to Aluminum Company of America, which it remained until 1999, when it was officially shortened to Alcoa.
The first employee of the new Alcoa joined the band of entrepreneurs as a young man and devoted most of the rest of his life to the company. Arthur Vining Davis came to Pittsburgh in 1888 from Hyde Park, MA. He was fresh out of Amherst College and only 21 years old. His father, a church pastor, asked his former parishioner Capt. Hunt for help in finding young Arthur a suitable position. Hunt took on Davis at his Pittsburgh Testing Laboratory, but shortly thereafter, Hunt and Clapp decided that Davis was the perfect fellow to team up with Hall.
Hall's relationship with Romaine Cole proved fruitful. Cole, who was the much more savvy businessman, had negotiated the agreement with Hunt and the other start-up investors which granted them 47% of the common stock of the start-up company. By the time of Hall's untimely death on December 27, 1914 at the age of 51, his estate was worth nearly 30 million dollars.
But Hall and Cole did not work well together. Davis took over when Cole left and stayed for the next 69 years. In the beginning, Davis and Hall were each taking 12 hour shifts and soon the plant was making between 30 and 50 pounds of aluminum per day. These were selling at $8.00 a pound and were kept in an office safe, although someone remarked that there was no need to keep them in the safe, since they were having trouble selling the new metal and it was unlikely anyone would want to steal it.
As the business progressed, Hall stayed in the background doing research and Davis moved into the leadership role. It would be up to Davis to make a market for the metal that no one knew or wanted. In 1890, Davis borrowed some molds from the Griswold Company of Erie, PA, a manufacturer of cast iron cookware, and had some aluminum teakettles made. Mr. Griswold was impressed and placed an order for 2000 kettles from Davis, who tried to explain that he only wanted to sell Griswold the aluminum. Griswold would have none of it, and so Alcoa was forced into the fabricating business to prove that there was a market for this metal.
It took some time and money to prepare the necessary patent papers for Hall's invention. The patent application was filed on July 9, 1886 but not actually issued by the patent office until April 2, 1889. In France, at nearly the same time, Paul L. T. Heroult had discovered a similar process and had filed a US patent.
The two applications were found to interfere with each other. Although Heroult's invention pre-dated Hall's, his application did not provide a "Preliminary Statement," as had Hall's. Under US patent law this limited Heroult to the date his application was filed in the US - May 22, 1886. Hall prevailed because he was able to prove through his sister's meticulous records that his date of invention was February 23, 1886.
Cowles and PRC
Patent disputes arose between the Cowles brothers and Hall. Cowles had started using Hall's process without licensing, and had acquired rights to the Bradley patents for the electric arc process they employed. After suits and countersuits, Cowles and Hall settled by Pittsburgh Reduction Company licensing the Bradley patents through 1909, and Cowles agreeing to purchase 146,000 pounds of aluminum annually at ten cents off the list price.
The Sherman Act became law on July 2, 1890, two years after The Pittsburgh Reduction Company began. The law makes restraints of trade illegal and declares that every person who monopolizes trade or commerce among the several states or with foreign countries shall be guilty of a misdemeanor.
By 1912, the Justice Department believed that Alcoa had violated the Sherman Act on three counts: making restrictive covenants, engaging in alleged acts of unfair competition and participating in foreign cartels. During the next five years, Alcoa held a monopoly on North American aluminum production and produced more than 63% of the total world output.
The fledgling Alcoa was busy trying to perfect its process and find a market for aluminum before its patent protections expired. Soon the Smallman Street works became inadequate. The company actively sought additional backers, including the young and successful Pittsburgh banking operation known as T. Mellon & Sons, and returned most earnings to the company during the first decade.
This additional investment allowed the company to move operations to nearby New Kensington, Pennsylvania in 1891. Their strategy was vertical integration. After establishing their core smelting business, the company expanded downstream into fabrication, and upstream into the extraction and manufacture of raw materials and power generation. Alcoa's New Kensington smelter ran on electricity generated by coal and steam. In 1891, the company opened another smelter in Niagara Falls that ran on hydropower supplied by the falls. In August 1895, they started producing metal at the new Niagara Works plant in New York.
Hall and his backers wanted to make aluminum a common metal. To do this, they would have to promote the use of aluminum as a substitute for more familiar commodities. The best way to compete with steel and wood was to lower the price of their product by refining their process and expanding production capacity. Between 1888 and 1897 they were able to reduce the price from $8.00 a pound to 36 cents a pound.
1903Alcoa and the dawn of flight
The world's first flying machine had an aluminum heart - made from Alcoa's new metal. The Wright Brothers didn't design their Flyer with any particular engine in mind. Then again, they couldn't find an off-the-shelf engine that could get a plane, a pilot, and itself airborne.
So they asked their bicycle-shop mechanic, Charlie Taylor, to build one. Taylor was self-taught, and brilliant: he put the engine together in just six weeks, at the Wright shop in Dayton, Ohio. To save weight, a local foundry cast the block and crankcase in an exotic material - aluminum. The metal came from Alcoa.
The little engine weighed only about as much as Orville Wright, but it put out 13 horsepower. All the brothers had hoped for was eight. It was the beginning of a partnership - design, performance, and Alcoa innovation in metal - that would continue for a century, and more, of flight.
Fly through the history of aviation with our 'Shaping the Future' aerospace timeline
1910Arthur Vining Davis
Although the Mellons controlled as much as one-third of the company stock by the early 1900s, they left the management of Alcoa to others. Arthur Vining Davis was considered too young to run the company when Captain Hunt died in 1899, so Richard B. Mellon was named President. Davis was named General Manager and took charge of operations, making important strategic decisions until 1910, when he was named President. Davis has been described as having "a brilliant intellect, a fierce dedication to perfection, and a vivid though quarrelsome personality." He was small in stature, self assured, and when excited or angry, was prone to sharp bursts of temper, at the same time remaining remarkably controlled and calm in times of stress. He inspired confidence in both colleagues and subordinates.
By 1914, Davis had stepped back from the operating administration of the company and moved to New York, although the company headquarters remained in Pittsburgh. Roy Arthur Hunt, Captain Hunt's son, stayed behind as the senior ranking operating manager and day-to-day administrative manager. He and the other managers shuttled back and forth between the company's facilities and New York on an overnight train. A. V.'s younger brother, Edward, who had joined the company in 1901, remained in Pittsburgh and worked on developing Alcoa's sales force. Having Edward in Pittsburgh helped A. V. maintain his authority in Pittsburgh. Upon Charles Martin Hall's death in 1914, the provisions of his will granted A. V. Davis stock, and the voting rights to additional stock, effectively giving Davis control of the company.
Coming of age (1920-1940)
1918World War I
The advent of World War I temporarily halted the threat of import competition to Alcoa, and the company became an exporter. By 1918 the New Kensington works was producing mess kits, canteens and helmets instead of cooking utensils. By the time the US entered the war, 90% of Alcoa’s production was used in military applications. Aluminum became regulated like other strategic materials and prices remained low.
As the war ended, Alcoa found itself with excess capacity, a huge decline in demand, and a return of imports. But price controls were lifted and the expansion of aluminum use in military applications spilled over into new civilian uses. The potential for aluminum use in aircraft looked particularly promising.
Aluminum's potential drew other companies to the market. In 1919, Richard S. Reynolds founded the US Foil Company, primarily to make foil wrappers for his uncle R. J. Reynolds' cigarettes. R. S. had been a law student at the University of Virginia in 1903 when his uncle told him he was "too good a businessman to stay in law." So R. S. worked with his uncle for a while in a variety of business ventures. Realizing that Uncle R.J.'s tobacco businesses would be inherited by R J.'s son's rather than his own, prompted R. S. to look into the packaging business as a way to build a legacy. Starting with foil for cigarettes, Reynolds Metals grew to become both customer and competition for Alcoa…and eventually part of the company.Aluminium Limited
After World War I, as power resources in the US became increasingly expensive, Alcoa expanded outside the US, purchasing interests in raw materials and water power. Alcoa entered the bidding for developments in Canada by James B. Duke. By 1925, a deal was struck giving Duke $16 million in preferred stock and 15% of the common stock. Upon Duke's death three months later, Alcoa purchased a controlling interest in the Canadian venture to help the Duke executors pay the estates taxes.
By 1928 Alcoa had over half of the world capacity in primary aluminum, 150,000 metric tons: 90,000 in the US, 45,000 in Canada and 15,000 in Europe, but then Arthur Vining Davis had a change of heart. Managing overseas operations, especially in sales, presented problems. Salesmen were neglecting foreign markets in favor of selling in the US. Since the war, there had been a progressive hardening of nationalist feelings, especially in the British Commonwealth. An independent Canadian corporation would have more latitude to participate in foreign cartels, or as Davis said, "to do business in the European way." So on June 4, 1928 Alcoa divested its ownership or interest in 34 companies worldwide and transferred them to Aluminium Limited of Canada.
Now 61 years old, Davis had started to think about stepping back from some of his duties. A large Canadian business would solve Davis's dilemma about what to do with Roy Hunt and his own brother, Edward. Roy had been in charge of production and fabrication, and Edward was in charge of sales. Edward was sent north with a few technical experts and salesmen to be President of Aluminium Limited, and Roy Hunt stayed in Pittsburgh and became President of the firm his father founded.
1930Aluminum Research Laboratories
Prior to the war, Alcoa concentrated on production. The war brought the realization that product improvements would be necessary. Germany had developed Duralumin, a copper-aluminum-magnesium alloy with extraordinary strength and Alcoa had nothing like it. Alcoa's research facilities were practically non-existent. With pressure from the government, Alcoa developed its 17S alloy, a Duralumin substitute.
Alcoa knew it would have to invest more in research. In December 1918, Francis C. Frary – a brilliant scientist who had achievements in chemistry, chemical engineering and metallurgy – was hired at a premium salary and given carte blanche to select his research staff. Frary was responsible for improving the Hall Process from 97.75% pure aluminum to 99.99% pure. In 1930, Alcoa's state-of-the-art Aluminum Research Laboratory was built in New Kensington, on a hill overlooking the works. Research continued to be decentralized and Frary’s organization became known as "the Laboratories".
Watch a short film about aluminum research at Alcoa (1940)
1941World War II
World War II made aluminum a strategic material - one of the materials most critical to the war effort. Aluminum was so strategic, in fact, that in 1942 eight German saboteurs landed from U-boats; four on Long Island and four just south of Jacksonville, Florida on a mission to destroy Alcoa's plants in Massena, East St. Louis and Alcoa, Tennessee.
At the same time, Alcoa was fighting for its life in the courts over antitrust issues.
Alcoa Antitrust Case
By 1924, the FTC had issued a report criticizing Alcoa’s practices. Further complaints were filed and investigations were undertaken, leading up to the 1937 antitrust case against Alcoa.
The FTC believed Alcoa tried to monopolize bauxite, attempted to monopolize the water power of the world, dominated and controlled the foreign market for aluminum in the US, and engaged in injurious price cutting.
Alcoa won the trial on all 130 counts. But the Government won the appeal. Review by the Supreme Court was impossible, since four of the justices had been involved in prior antitrust suits against Alcoa. A special act of Congress was necessary to give the 2nd Circuit Court of Appeals the weight of a Supreme Court opinion in this matter. The court found Alcoa controlled over 90% of the US market for aluminum ingot. This proportion alone was sufficient to support a violation of the Sherman Act, regardless of intent to monopolize.
The Alcoa case is still one of the longest trials to date. The company came close to being dissolved, and may have been, if not for gratitude for the role Alcoa played in winning World War II. World War II began during the antitrust proceedings. While Alcoa was fighting in the courts, the company’s aluminum became the strategic material critical to winning the war.
1942Mobilizing for wartime production
As early as 1939, R. S. Reynolds, president of Alcoa's then-rival Reynolds Metals, had traveled to Europe and seen firsthand the German military buildup. When he returned to the US, Reynolds urged A. V. Davis to triple capacity for aluminum production for aircraft.
In 1942 Reynolds testified before a Senate Committee, urging increases in aluminum production capacity. The government believed that the shortage was due to Alcoa having a monopoly in US primary aluminum production. Alcoa received negative publicity for failing to anticipate war production needs. Alcoa's monopoly was cited as the principal reason.
Alcoa met wartime challenges with speed that is astounding today. In the space of three years, Alcoa built over 20 plants: 8 smelters, 11 fabricating plants, 4 refineries, and operated them for the government. Between 1939 and 1944 production rose from 146,000 short tons to over 800,000 short tons with purchased metal amounting to over 600,000 short tons. Employment rose from 26,179 in 1939 to 95,044 by 1944. Total investments in the aluminum industry during World War II rose to $672 million, of which $474 million were Alcoa investments.
1945After the War
Before the war was even over, the War Surplus Property Board was established. They lost no time. Within days of Japan's surrender, the US canceled Alcoa's wartime plant leases. Most of the wartime plants were sold to rivals Kaiser and Reynolds, at or below the cost to build them, and Alcoa was required to license the technology necessary to run them. The only plant Alcoa was permitted to keep was the Cressona extrusion plant (now part of SAPA).
The country was left with an oligopoly of four major aluminum companies - Alcoa, Aluminium Limited (which was to become Alcan), Reynolds and Kaiser. In 1947, Alcoa petitioned for a ruling that it no longer monopolizes the market, but the ruling was rejected and the Justice Department retained jurisdiction over Alcoa until 1957.
A. V. Davis, now 80, moved to Florida, but continued to visit both the New York City and Pittsburgh offices. He embarked on a second career as a land developer.
Leadership in a global industry (1940-1960)
1950sThe Big Board
In 1949 George Clapp, one of the original founders of the Pittsburgh Reduction Company, died and was replaced on the Board by Alfred M. Hunt, Captain Hunt’s grandson. In 1950, the court ordered Alcoa’s major shareholders to divest either Alcoa or Aluminum Limited (Alcan) holdings. Only E. K. Davis sold his Alcoa shares. The court retained jurisdiction over Alcoa to assure that Reynolds and Kaiser did not become weak, ineffective competitors.
In 1951 Roy Hunt retired as President and Irving W. (known as Chief) Wilson became the first President from a non-founding family. Alcoa had been listed on the Curb exchange, the forerunner of the American Stock Exchange in 1925, but on June 11, Alcoa moved to the "Big Board." Alcoa ventured into television advertising in 1951 when Alcoa sponsored Edward R. Murrow's "See It Now" CBS news program. In 1952, the Alcoa Foundation was created with the mission to actively invest in the quality of life in Alcoa communities worldwide, and that same year, the Alcoa Building in downtown Pittsburgh was completed as a showcase of aluminum architectural applications.An open market and a new era
In the 50s, the four "majors" were joined by additional competitors: Anaconda in 1955, Ormet in 1956 and Harvey in 1958. These newcomers established smelters in the US and all were eager to capitalize on the postwar boom. Alcoa's loss of market share was more than offset by increased demand for products. In August 1957, A. V. Davis retired after 69 years of service.
Aluminum Competition: Out of the Antitrust Shadow
Not long after the end of Alcoa's monopoly, there was competition: Anaconda in 1955, Ormet in 1956 and Harvey in 1958. These newcomers established smelters in the US. Alcoa’s loss of market share was more than offset by increased demand for products.
Roy Hunt had been averse to overseas expansion since the 1920s. Alcoa passed up oversees opportunities until Lawrence Litchfield, head of bauxite operations, contracted to enter a French/Swiss/Canadian consortium to mine in Guinea in 1957 without Hunt’s knowledge. Hunt was furious, but his active opposition waned. The 1958 Brokopondo venture in Suriname for construction of a hydroelectric plant and smelter was Alcoa’s first major offshore mine-to-metal venture.
The Aluminum Christmas Tree
Introduced to the market in 1959 by the Aluminum Specialty Company of Manitowoc, Wisconsin, the aluminum Christmas Tree soon became a staple in people's homes at Christmas time. Aluminum trees had a unique, "modern" look that appealed to consumers during the the late 50s and early 60s. They were easy to set up and take down. Instead of traditional string lights, ighting was provided by a rotating color wheel - a spotlight with three or four colored lenses that changed the apparent color of the tree as the lens rotated in front of the light.
Eventually, several dozen companies offered all sorts of aluminum Christmas Trees for sale - tabletop versions, wall mounted versions, and free-standing versions in various sizes. Some had as few as two dozen branches; others had as many as two hundred and fifty! Not content to offer just silver-colored trees, manufacturers soon offered colored aluminum trees as well - green, blue, red, gold and even pink ones. The silver tree reigned supreme, however, and aluminum Christmas trees in colors other than silver are quite hard to find today. The pink ones are particularly rare; we would estimate that only one out of every 10,000 aluminum trees made were pink in color.
Download "How to Decorate Your Aluminum Christmas Tree," an Alcoa brochure from 1959
A household word (1960-1990)
After success with Brokopondo, Alcoa was eager to participate in offshore ventures, and in 1961, formed Alcoa of Australia with Western Mining to develop Australia’s huge bauxite reserves. In the mid-1960s, Alcoa began developing aluminum operations in Brazil.
Alcoa moved into the real estate development business starting with Century City in Los Angeles. According to Tod Hunt Jr., at one point, Alcoa was the second largest real estate developer in the U.S.
Frederick J. "Fritz" Close (Chairman 1966-1970) was Alcoa's most notable salesman. Close was a champion of research and development and led the company during its venture into commercial real estate construction. He carried an enthusiastic spirit for the development of new initiatives, and it was John Harper who drove the strategy.
John D. Harper (President 1963-65; President and CEO 1965-70; Chairman and CEO 1970-75) joined Alcoa full time in 1933. Under his command, Alcoa moved deeper into fabricated products. Harper had a talent for politics. Krome George said of Harper, "drop him in the middle of the Sahara Desert, and he’d know the guy that ran the nearest oasis in ten minutes."
In 1961, Alcoa entered the market for aluminum ends for beverage cans first in juice cans. Alcoa developed the Easy-Open aluminum technology and convinced the Pittsburgh Brewing Company to use it in 1962 for their Iron City Beer, followed by the Schlitz and Busch brewing companies. By the end of 1963, the aluminum top had been adopted by most brewers and was on 40% of all US beer cans. By 1968, aluminum ends were more than 80% of the canned beer market. (Today, nearly 100% is aluminum.)
Close was the force behind the rigid container sheet (RCS), Alcoa and the industry's most important new product of the post-war era, but Harper was the one that committed Alcoa to the RCS market in advance of the industry.
In 1965, the first "outside" director was added to the board, Paul Miller of First Boston Corp.
The Black Executive Exchange Program was started in 1968, which featured black industrial personnel lecturing at predominately black colleges to bring skills and experience of black professionals to campus.
The 1970s brought further overseas expansion. By early in the decade, Alcoa established fabricating plants in Colombia, El Salvador, France, The Netherlands, West Germany, Morocco, Tunisia and Libya.
Additional outside directors and increasing ownership by institutional investors brought additional pressures to maximize profits. Energy costs surged due to the oil shortage and embargo. Power costs at Alcoa's seven domestic smelters increased 400% during this decade. Additional competition from non-aluminum materials rose during this decade as well.
Alcoa broaden its diversity, including creating the Aid to Minority Enterprises committee "to seek out possible suppliers from potential and existing minority enterprises;" the Alcoa Foundation supported Minority Engineering Programs, and in 1977, Franklin Thomas became the first African American appointed to the Board of Directors.
In 1978, primary aluminum began trading on the London Metal Exchange.
W.H. Krome George (President 1970-72; President and COO 1972-75; Chairman and CEO 1975-1983) invested in modernization and introduced computer information systems into smelting and rolling operations and used mathematic modeling to control production and cut costs. Under George's leadership, Alcoa’s foreign investments surged in Brazil and Australia and the Business Unit concept emerged.
Television advertising made Alcoa a household word.
Alcoa in the 1980s and 1990s
While Krome George argued that aluminum still had untapped high technology potential, Charlie Parry (President 1981-83; Chairman and Chief Executive Officer 1983-87) expanded away from aluminum and diversified into non aluminum products. Alcoa moved into products where our technical know-how with aluminum-related materials was thought to give us an advantage.
In 1987, Paul O'Neill was selected as Chairman, the first to come from outside Alcoa. Krome George, who had met Paul O’Neill while on International Paper's board, was instrumental in O'Neill's rise to become Chairman of Alcoa.
O'Neill reined in product diversification and re-focused on Alcoa's core aluminum businesses. Safety became a primary concern and profit sharing for employees and stockholders was instituted, both of which boosted internal morale and favorable market reaction.
O'Neill favored a decentralized Business Unit structure, and completely turned the traditional corporate structure pyramid on its head. Alcoa was focused on the customer. The reverse pyramid model emphasized the importance of customer satisfaction as the way to profitability.
The collapse of the Soviet Union plunged aluminum prices as Russia flooded the market with aluminum in a desperate move to raise cash. In addition, the economic downturn of the early 1990s necessitated layoffs and other cost-cutting measures at Alcoa.
By the mid-1990s, O'Neill's strategy was paying off and revenues were rising again. Information systems were upgraded and plans began for a new, state-of-the-art corporate office on Pittsburgh's north shore. The company created its first Diversity Steering Committee, and in 1997, Ernie Edwards was named the first African American Senior Vice President and Controller.
Alain J. P. Belda succeeded O'Neill as CEO in 1999, the year the company was officially renamed Alcoa Inc. to represent our global focus.
We can't wait for tomorrow (Alcoa 1990 through today)
As President under Chairman O'Neill, Alain Belda championed the Alcoa Business System as the method that fulfills the promises of the quality campaigns of the 1980s and '90s. Alcoa made strategic acquisitions, including Alumax, Reynolds and Howmet businesses.
In 2001, Paul O'Neil left Alcoa and became Secretary of the Treasury. Belda became chairman and chief executive officer.
The American Chemical Society designated the Commercialization of the Hall Aluminum Process a National Historic Chemical Landmark on November 2, 2001. Read more.
In 2002, the Alcoa Women's Network (AWN) was established, and in 2003, the African Heritage Network (AHHN) established.
As Chairman and CEO, Belda continued the direction O'Neill began with expansion through acquisition, careful cost management and realigning businesses to focus on Alcoa's most important markets: aerospace, ground transportation and defense.
The events of 9/11, rising fuel costs, increasing instability within the metal markets, and the global economic downturn sent Alcoa on a roller coaster ride in the first years of the new millennium. After an initial drop, aircraft orders gradually rose again in the years after 2001, but global increases in energy costs brought another round of slowing in all transportation markets.
In 2006, Alcoa hired its Director of Workforce Diversity, and in 2007, the Employees at Alcoa for Gay Lesbian Equality (EAGLE) group was established.
Klaus Kleinfeld became president and chief executive officer in May 2008. In 2010, Alain Belda retired and Klaus Kleinfeld became Chairman and CEO.
In February 2011, Alcoa celebrated 125 years of aluminum. In celebration of Hall’s remarkable invention, Alcoa initiated a series of events and activities to recognize Hall’s achievement and the influence of this miracle metal. This included a donation of $10,000 to the Oberlin College’s Green EDGE Fund, which finances environmental projects on the Oberlin campus and nearby community.