Hall's patent
In 1886, Charles Martin Hall, a graduate of Oberlin College, discovered the process of smelting aluminum, almost simultaneously with Paul Héroult in France.[6] He realized that by passing an electric current through a bath of cryolite and aluminum oxide, the then semi-rare metal aluminum remained as a byproduct.[7] This discovery, now called the Hall–Héroult process, reduced production costs.[8]
Fewer than ten sites in the United States and Europe produced aluminum at the time. In 1887, Hall agreed to try his process at the Electric Smelting and Aluminum Company plant in Lockport, New York. Still, it was not used, and Hall left after one year, teaming up with Alfred E. Hunt to form a new company.[9]
After graduating from Amherst College in 1888, Arthur Vining Davis joined the new venture because Arthur's father knew Alfred Hunt. At the time, aluminum sold at almost $5 per pound, making it too expensive to be used commercially. They worked to lower the cost of production using Charles Hall's ideas; Hall, Davis, and others worked 12-hour days together for months on the experiments. Their first commercial aluminum pour was on Thanksgiving Day in 1888.[10]
Pittsburgh Reduction Company
The Pittsburgh Reduction Company began with an experimental smelting plant on Smallman Street in Pittsburgh, Pennsylvania with Hunt as president and Hall as vice president. In 1891, the company began production in New Kensington, Pennsylvania. Davis was named general manager and appointed to the board of directors in 1892. In 1895, a third site opened at Niagara Falls.
Hunt's departure
Hunt left the company in 1898 to fight in the Spanish–American War. While in Puerto Rico, he contracted Malaria. Less than a year after his return to the states, he died from complications of the disease at age 44.[11]
By about 1903, after a settlement with Hall's former employer, and while its patents were in force, the company was the only legal supplier of aluminum in the United States.[12][13]
By 1902, New Kensington consisted of 173,000 sq. feet on 15 acres with 276 employees. The company operated hydropower and reduction plants in Niagara Falls, NY (1895), Shawinigan Falls, Quebec (Northern Aluminum Company), mining operations in Bauxite, AR (1901), and reduction facilities in East St. Louis, IL (1902). "The Aluminum Company of America" became the firm's new name on January 1, 1907.[14] Davis was named company president in 1910 when the
The World Wars
Historian George David Smith notes that "war was good to Alcoa."[15] The FTC would bring an antitrust case after WWI.[16] By the end of World War I Alcoa's New Kensington facility accounted for 3,292 workers—a fifth of the local population—and covered over 1 million square feet of manufacturing space on 75 acres.[14] The war enabled Alcoa to increase production by 40% and to export some ninety million pounds to the Western Allies.[15]
After WWI, Alcoa obtained the rights to Alfred Wilm's duralumin patent, which led to additional research into other aluminum alloys. By 1923, Alcoa's New Kensington, Pennsylvania plant was using horizontal extrusion presses, with preheated billets, for aerospace and construction applications.[17] One of the first industrial uses was for the Navy's
Alumax
In 1998, Alcoa acquired Alumax in a cash and share deal for $2.8 billion. Alcoa paid $50 a share in cash for half of the shares and 0.6975 Alcoa share for each of the remaining Alumax shares. Alcoa also assumed $1 billion in debt.[20] Alumax's assets included the Eastalco aluminum smelter in Adamstown, Maryland, the Intalco aluminum smelter in Ferndale, Washington, the Deschambault Plant in Deschambault, Québec, Canada and the Kawneer brand of building construction products.
Reynolds
In 2000, Alcoa acquired Reynolds Metals Co. in an all-share deal for $4.5 billion.[21] To clear anti-competition regulatory hurdles, Alcoa was required to sell Reynolds's 25% interest in a Washington smelter and all of Reynolds's alumina refineries. Reynolds owned a 56% interest in the Worsley alumina refinery in Australia, a 50% interest in a refinery in Germany, and a 100% interest in a Texas refinery. Alcoa also planned to sell Reynolds's construction and distribution business and the company's $400 million transportation business.[22] Alcoa sold its packaging and consumer business, formerly called Reynolds Metals, to the Rank Group for $2.7 billion in 2008.[23]
Cordant
In 2000, Alcoa also purchased Cordant Technologies Inc. for $57 a share in cash, or $2.3 billion, and assumed $685 million of Cordant's debt for a total transaction value of $2.9 billion.[24] Cordant's divisions included Huck Fasteners, Jacobson Mfg. Co., Continental/Midland Group, its 85% interest in Howmet International Inc., and Thiokol Corporation.[25][26][27] In 2001, Alcoa sold Thiokol for $2.9 billion to Alliant Techsystems (ATK).
Chalco
Alcoa purchased an 8% stake of Aluminum Corporation of China (Chalco) in 2001.[28] It tried to form a strategic alliance with China's largest aluminum producer, at its Pingguo facility; however, it was unsuccessful. Alcoa sold their stake in Chalco on September 12, 2007, for around $2 billion.[29][30]
Chemicals
In 2004, Alcoa's specialty chemicals business was sold to two private equity firms led by Rhône Group for an enterprise value of $342 million, which included the assumption of debt and other unfunded obligations.[31] Rhône Group then changed the name to Almatis, Inc.
Corporate relocation
In 2006, Alcoa relocated its top executives from Pittsburgh to New York City while its operational headquarters was still at its Corporate Center in Pittsburgh. Alcoa employed approximately 2,000 people at its Corporate Center in Pittsburgh and 60 at its New York office.[32] Alcoa moved its headquarters back to Pittsburgh effective September 1, 2017, as part of a general consolidation of administrative facilities around the world.[33][34] In October 2018, Alcoa announced plans to move from Pittsburgh's North Shore to a downtown Pittsburgh location.[35]
Alcan bid
In May 2007, Alcoa Inc. made a US$27 billion hostile takeover bid for Alcan.[36] The bid was withdrawn when Alcan announced a friendly takeover by Rio Tinto in July 2007.[37]
On May 8, 2008, Klaus Kleinfeld was appointed CEO of Alcoa, succeeding Alain Belda.[38][39] On April 23, 2010, Alcoa's board of directors selected Kleinfeld to the office of chairman, following Belda's planned retirement.[40]
Recycling
On July 16, 2012, Alcoa announced that it would take over full ownership and operation of Evermore Recycling and make it part of Alcoa's Global Packaging group. Evermore Recycling recycles used beverage cans.[41]
In June 2013, Alcoa announced it would permanently close its Fusina primary aluminum smelter in Venice, Italy, where production had been curtailed since June 2010.[42]
On January 9, 2014, Alcoa settled with the U.S. Securities and Exchange Commission and the U.S. Department of Justice over charges of bribing Bahraini officials. Under the settlement terms, they will pay the SEC $175 million to settle the charges. To resolve the criminal claims with the DoJ, Alcoa World Alumina (AWA, a company within Alcoa World Alumina and Chemicals) is pleading guilty to one count of violating the anti-bribery provisions of the Foreign Corrupt Practices Act (FCPA). AWA will pay the DoJ $223 million in five equal installments over the next four years, bringing the company's total bill for the scandal to $384 million.[43]
Company split
In June 2016, Alcoa Inc. announced plans to split itself into two companies: Alcoa Inc would be renamed as Arconic and would take over the business of designing and building processed metal parts, primarily for the automotive and aerospace industries; a new company, Alcoa Corporation, would be set up and spun out of the remainder of Alcoa Inc. and retain the Alcoa name. Alcoa Corp. would continue the mining, smelting, and refining of raw aluminum.[44] The split was completed on November 1, 2016.[45]
