Alcoa announces to implement new operating model to reduce overhead cost

Alcoa Corporation, a global leader in bauxite, alumina, and aluminium products, has reportedly announced today, on September 9, that it will implement a new operating model with effect from November 1, 2019. The company said the new model would result in a leaner, more integrated, operator-centric organisation that accelerates the company’s strategic priorities.

As per the report, the restructuring of the operating model will help Alcoa reduce its overhead cost, promote operational and commercial excellence, increase connectivity between the company’s plants and leadership, ensure safety, and generate sustainable profitability. The Alcoa executive team will be narrowed down to seven direct reports to the CEO from twelve and business unit structure will be eliminated. Sales, procurement, and other commercial capabilities will be consolidated on the other hand.

“These changes to our operating model build on the important progress we’ve made since our 2016 Separation to reduce complexity, drive returns and strengthen the balance sheet, all with the goal of creating a stronger Alcoa,” said Roy Harvey, President and Chief Executive Officer.

He added, “Most importantly, this new organizational structure reinforces that our operations are the heart of Alcoa. Among other benefits, it will promote stronger connectivity between our plants and executive leadership and swift decision-making.”

The seven members of Harvey’s Executive Team include Leigh Ann Fisher, the current Executive Vice President and Chief Administrative Officer; Jeffrey Heeter, Executive Vice President, General Counsel and Secretary; Benjamin Kahrs, Senior Vice President, Manufacturing Excellence and R&D; Michelle O’Neill, Senior Vice President, Global Government Affairs and Sustainability; William F. Oplinger, Executive Vice President and Chief Financial Officer; Timothy Reyes, Executive Vice President and President, Aluminum; John Slaven, Executive Vice President and Chief Strategy Officer.

Michael Parker, Executive Vice President and President, Alumina; and Garret Dixon, Executive Vice President and President, Bauxite, will depart Alcoa after assisting with the transition to the new operating model.

Additional organizational changes will be implemented to reduce overhead cost. Alcoa is already finalising the related financial impacts and expects to report restructuring charges at the close of the third quarter. By the end of the first quarter of 2020, the remodelling is expected to be substantially completed.

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