Actions amounting to approx. $200 million have been planned by Arconic to overcome disruption from the Covid-19 pandemic.
Effective immediately, the group will reduce operating costs by approx. $150 million (on annualised run-rate basis) as well as capital reductions of $50 million.
The CEO’s salary and the Board’s annual cash retainer will be reduced by 30%. Senior level management will have a 20% salary reduction – all other salaried employees will incur a 10% salary reduction. There will also be some restructuring of the workforce.
In addition, the Tennessee and New York facilities have been idled until demand returns. All other US-based rolling and extrusion facilities will decrease production while rolling mill facilities in Europe, China and Russia will modify schedules, adjusting work hours and lowering costs.
CEO Tim Myers said: “Arconic was launched with a strong balance sheet and capital structure. Additionally, we have built tremendous momentum through 2019 and into this year by driving improved operational and financial performance. However, as COVID-19 continues to escalate throughout the world, we are taking aggressive actions to increase the safety of our employees, respond to decreasing demand, and preserve the financial strength of our business.
“Arconic employees have strong values that have been proven time and again, and their safety is our highest priority. We are heightening measures at all of our locations to maintain strict hygiene, increase social distancing, and enable employees to work remotely where possible. I am confident we will overcome present challenges to achieve sustainability and industry-leading growth well into the future.”
Chairman of the Board Frederick “Fritz” Henderson added: “The Board supports management’s plan to swiftly and actively mitigate the impact from COVID-19. We are taking these actions as well as others as necessary to preserve our financial strength for the long-term benefit of all of our key stakeholders.”
