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Aluminum April 13, 2020 07:00:17 PM

Arconic Implements Cost-Reduction Plan to Mitigate COVID-19 Impacts

Paul Ploumis
ScrapMonster Author
The salary of CEO as well as annual cash retainer of the board of directors will see 30% cut.

Arconic Implements Cost-Reduction Plan to Mitigate COVID-19 Impacts

SEATTLE (Scrap Monster): Pittsburgh-headquartered Arconic Corp. Board of Directors today declared several measures aimed at further mitigating the impacts of COVID-19 pandemic on the company.

According to the company, the actions are expected to cut operating costs by $150 million on an annualized run-rate basis. These will be effective with immediate effect and will continue until significant improvement in market conditions.

The salary of CEO as well as annual cash retainer of the board of directors will see 30% cut. The salary of senior level management will be reduced by 20%. All other salaried employees will see 10% salary reduction. In addition, the company will implement restructuring of salaried workforce, aimed at 10% reduction. Arconic has also decided to suspend the 401(k) match program for salaried employees.

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In response to falling demand, Arconic has already idled its Tennessee and New York facilities. All other U.S.-based rolling and extrusion facilities will cut production and continue to operate with reduced labor force. All rolling mill facilities in Europe, Russia and China will operate on reduced capacities.

The aggressive actions are necessary to respond to declining market demand situation and preserving financial strength of the business, which in turn will assure long-term benefits to all its key stakeholders, said Tim Myers, CEO, Arconic.

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