Excellent. Well, I'm delighted to be joined this morning by Bill Oplinger, who is president and CEO of Alcoa. Bill has been in the top job for just over 24 months, and to say that he has been busy is an understatement, I would say. I'm looking forward to talking to him about the changes that he's made under his leadership, as well as more broadly the aluminum industry, some of the changes we're seeing in demand. For those not familiar with Alcoa, its founding traces back to 1886. I think I'm right in saying it literally gave birth to the aluminum industry by discovering a new way of producing aluminum through the electrolysis process, which really brought aluminum to mass commercial markets. I think I'm right in saying it IPOed in 1925, something like that. So it's celebrating its 100th year as a public company. Its heritage really is second to none, I would say. Today, Alcoa employs 14,000 people, 25 operations around the world, eight different countries. For those not familiar, 10 years ago it separated its upstream and downstream business. The downstream business became known as Arconic.
And subsequently split again between Arconic and Howmet.
Yeah. So Alcoa today is the upstream business of bauxite, alumina, aluminum. Bill, you're one of those success stories that has literally risen through the ranks all the way to the top job. How long have you been at Alcoa? And can you give us a flavor of the roles that you had prior to 2023?
I've been with Alcoa now for 25 years. I joined in March of 2000. Started as the probably lowest level financial analyst within the company and have had a fantastic career at Alcoa, a variety of different roles between finance, operations, and ultimately I became chief operating officer of the upstream business within Alcoa Inc. back in 2012. Then in 2013 became CFO of the parent company. We broke the company up in 2016 as you alluded to, a massive effort to separate a 100-year-old company into two companies. I went with the upstream company, which is mining, refining, smelting, casting. When we were born, we had a little bit of rolling and we divested those rolling assets pretty quickly. Then became chief operating officer for around 9 months and ultimately became CEO in 2023. It's been a fantastic career at Alcoa.
So you're appointed CEO in September 2023, and in just over two years, I think I'm right in saying you have executed the largest takeover in the company's history, initiated a monetization program, launched a new vision for the business, and also executed a successful profitability savings program of around $650 million a year. This is quite interesting because investors have been quite vocal in asking majors to be disciplined in M&A approach, and five months into your role in the top job you launched the biggest takeover in the company's history.
We launched that publicly one month within taking over. We started working on it and it took us about four months to get it announced publicly, so it was a busy first month in the job.
This is Australia's Alumina Limited, which you not only successfully launched but then completed. Talk us through the rationale for that in the context of value creation, and how did you guide investors as to what you saw as a value opportunity?
By way of background, Alumina Limited was spun out of Western Mining back in 2002. Alcoa Corp was spun out of Alcoa Inc. in 2016. This joint venture between Alcoa and Alumina Limited was a small joint venture within a very large Alcoa Inc. But when those two separations occurred over the course of 20 years, it became a very large joint venture in a much smaller company, Alcoa Corp. We had been looking at opportunities to consolidate that minority interest partner many times over the decades. What happened in October of 2023 that allowed us was that between October and February, the planets aligned on the ability to get this transaction done. When we announced it, we talked about some of the real benefits. It gives us operational control, complete operational control, complete strategic control of the assets. In addition, we were able to reduce a small amount of overhead in their corporate structure. We very quickly moved on to a transaction where we were able to monetize our 25% in Saudi Arabia. That would have been a very difficult transaction to get done had we not gotten the Alumina Limited transaction done. We repositioned some debt in Australia closer to the assets, giving us a tax shield based on the earnings in those assets, and paid off their debt early. We timed it very well. Aluminum markets did very well immediately. Aluminum markets have settled back down now, but we're really pleased to have gotten that done.
And so you're now a shareholder in Ma'aden and the topco.
We are. We own 86 million shares in Ma'aden Topco. By way of background, we invested, Alcoa Inc. the parent company invested a billion dollars in Saudi Arabia back in 2009-2010 time frame. We had a 25% ownership stake in mine, refinery, smelter, and rolling mill. What we did this year was swap out that 25% ownership for a stake in the parent company. Stock's done great. We're very happy with that.
I've read the reports. I think it was originally worth 900, now it's worth like one and a half billion dollars.
I like to remind the CEO of Ma'aden, who used to be an Alcoan, that I'm his boss in small part now. But the stock's done great. We're very happy with that investment.
You talked about the separation between the upstream and the downstream business, but analysts really say that Alcoa has changed significantly in the last three or so years. Why is that and what makes it so different from its peer group?
We have really focused over the last two years on changing the culture of Alcoa Corp. We are trying to drive towards a high performing culture within the company. That will benefit safety, and we're starting to see the benefits in safety. Our trailing safety stats improve year-over-year. Production, you see that in the stability that we've had over the last couple of years. Ultimately it translates into the financials. You mentioned the cost reduction program. We were able to do that at the same time as trying to change the culture within the organization. You hear me talk about high performing culture. It starts with aligned goals and interests. I have a plan on a page that goes all the way down through the organization. People have a 2026 plan on a page. We then have aligned incentives, so you get paid based on how successful you are. We then have very frank and open dialogue. That can be really good when we're successful and we celebrate our wins, but it can also be fairly difficult to acknowledge where we've been less than successful and have those dialogues. Ultimately that ends up in empowerment in the organization. I like to use an example of two regions in the world. When I was chief operating officer, we had one region where everything went extremely well. The leader of that region, the regional vice president, was completely empowered to make things happen. We had another region where things were very difficult, and I probably micromanaged that region on almost a daily basis. When you have a high performing culture, it ends in significant empowerment and you see it in the results: safety, production, financials.
