Alcoa Inc. stands for Aluminum Company of America, and it is the third largest producer in the world of aluminum. The organization supports the activity of various industries such as technology, smelting, mining, refining, recycling, and fabricating. Other businesses under its umbrella are Kawneer which handles building products and Howmet Castings. Since November 1, 2016, Aroca is split into two unities. These are Alcoa Corporation and Arconic Inc. The chief executive of Alcoa became the CEO of the new company. Klaus Kleinfeld put a lot of effort in overseeing the separation. However, he is to leave his company because of a mysterious letter he sent to an important hedge fund.
Elliot Management Described the Mysterious Letter as a Tool of Intimidation
After he succeeded to mold a new and promising company out of an old one, Arconic CEO has to leave its several-month-old organization. This sudden event seems to be the result of the pressure coming from the hedge fund Elliot Management. The activist firm wanted the replacement of Klaus Kleinfeld in the first place with a CEO appointed by them. However, it was a mysterious letter that sealed the departure of Kleinfeld for good.
Out of the blue, Klaus Kleinfeld handed in his resignation as the CEO of Arconic. He also left the board of the company. The organization explained this sudden internal decision as the outcome of a mysterious letter Kleinfeld sent to a senior executive of Elliot Management. The message of the letter was not disclosed yet.
After the announcement of Klaus’ departure, the activist firm made a public statement regarding this event. The company described the letter as a tool of extortion.
“The letter read as a threat to intimidate or extort a senior officer of Elliott Management based on completely false insinuations, a threat that we took seriously and about which we immediately and privately informed the Board.”
David Hess Is Going to Be the Interim CEO
Arconic denied rumors according to which the departure of Klaus Kleinfeld was the result of the pressure and criticism coming from the hedge fund. On the other hand, they delivered no hint towards the reason behind this resignation. However, Elliot Management claimed that it would continue to address the weakness of the Arconic board even further. To its view, the company is pulled back from success by poor leadership.
For the time being, David Hess who is a member of the board is going to act as an interim CEO. At the same time, Patricia Russo will be the interim chair of the board.
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