Alcoa Corporation, a global leader in bauxite, alumina, and aluminum, announced on September 25, 2023, that William F. Oplinger has been elected to serve as President and Chief Executive Officer of the company and as a member of its Board of Directors. Oplinger succeeds Roy C. Harvey, who will serve as Strategic Advisor to the CEO until December 31, 2023.
Oplinger, 56, has been with Alcoa since 2000 and has held various leadership positions, including Executive Vice President and Chief Operations Officer since February 2023 and Executive Vice President and Chief Financial Officer from November 2016 to February 2023.
He has also overseen the company’s mining, refining, smelting, casting, and energy businesses as Chief Operating Officer for the Global Primary Products division.
Oplinger takes the helm of Alcoa at a time when the aluminum industry is facing multiple challenges, such as rising energy costs, environmental regulations, trade tensions, and oversupply from China.
Alcoa, which has a vision to reinvent the aluminum industry for a sustainable future, has been implementing various measures to improve its competitiveness and profitability, such as reducing its debt, optimizing its portfolio, and investing in low-carbon technologies.
San Ciprian complex in Spain poses a major challenge for Alcoa
However, one of the most pressing issues that Oplinger will have to deal with is the situation of the company’s San Ciprian complex in Spain, which is running at 50% capacity for alumina production and has a fully curtailed aluminum smelter. The complex employs about 1,000 workers and has been incurring substantial losses due to high electricity prices, low aluminum prices, and outdated technology.
Alcoa has been trying to sell or close the complex since 2020 but has faced strong opposition from the labor union and the government, demanding guarantees for the workers’ jobs and the continuity of industrial activity. In January 2024, Alcoa agreed to restart the aluminum plant in phases during the year, as part of a deal with the union and the government that included financial and regulatory support.
Oplinger warns of hard decisions if the situation does not improve
However, in a call with analysts on Wednesday, Oplinger said that it does not make economic sense for the company to follow through on the phased restart, as the complex is still losing money and the market conditions have not improved.
He said that if the situation does not change significantly in the months ahead, the company will have no choice but to make hard decisions that will adversely and potentially irrevocably impact employment and the economy.
Oplinger said that the company would need an agreement from the labor union to close the facility and that Alcoa is working with the government and employees to make the operation viable. He said that there is limited cash to run San Ciprian and eventually it will run out.
Reactions from labor unions, government, and analysts
The announcement of Oplinger’s appointment and the warning about San Ciprian’s future has sparked reactions from various stakeholders. The labor union said that it will not accept any closure or layoff plan and that it will mobilize to defend the workers’ rights and the industrial future of the region.
The government said that it will continue to work with Alcoa and the union to find a solution that preserves the activity and employment of the complex. The analysts said that Oplinger’s experience and knowledge of the company will help him navigate the challenges and opportunities ahead.
Alcoa reports positive results and expects growth in aluminum demand
Alcoa, which reported a net income of $309 million in the third quarter of 2023, up from $221 million in the same period of 2022, said that it expects global aluminum demand to grow by 8.5% in 2023, driven by the recovery from the pandemic and the transition to a low-carbon economy.
The company stated it could capitalize on these trends due to its strong balance sheet, diversified portfolio, and commitment to sustainability.
