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Home> CFO in the Media 2002
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Demonstration does little to disrupt Alcoa meeting

TRIBUNE-REVIEW
Saturday April 20, 2002

By Lou Ransom

Alcoa Inc. Chairman and Chief Executive Alain Belda said Friday that the aluminum giant's 39 percent drop in earnings last year was the result of the U.S. economic slowdown coupled with matching recessions in Europe and Asia.

Speaking at Alcoa's annual shareholder's meeting yesterday, Belda also pointed out that Alcoa, the world's largest producer of aluminum products, responded to the unfavorable economic conditions by enjoying its second-highest earnings year in history, at $908 million, or $1.05 per share, compared to 2000's record earnings of $1.484 billion, or $1.80 per share. But last year's performance wasn't good enough, he said.

" While our 2001 financial results were better than those of most of our competitors in our diverse markets," Belda said, "they did not advance in closing the gap between our performance and our stated objective: standing among the industrial companies in the first quintile of return on capital among Standard and Poor's Industrials in 2003. We still intend to meet that objective."

Alcoa's annual meeting yesterday was uneventful, despite the presence of union protestors outside the Westin Convention Center Hotel Downtown.

Belda boasted that the Pittsburgh-based company looked to shareholders' interests by cutting expenses, paying down debt, reducing the work force by 10,000, to 129,000 employees, and closing 18 locations. He said that the company planned to continue to grow through strategic partnerships, such as its relationship with Chalco (Aluminum Corporation of China) and selective acquisitions.

Separately, Alcoa's board of directors adopted a resolution yesterday limiting the amount of non-audit compensation its independent accounting firms can receive from the company. The resolution is designed to prevent the kind of excessive billing that marked the relationship of energy giant Enron Corp. and its accounting firm, Arthur Andersen.

Alcoa will limit its auditor, PricewaterhouseCoopers, to audits and acquisition services. Last year, Alcoa paid the auditor $5.7 million for audits and $6.9 million for other services that Alcoa said were mostly audit-related, such as tax preparation and advice and reviews of benefit plans.

" We will continue to strictly limit the non-audit work they perform," Belda said in a statement.
The protesters outside the meeting were rallying for union representation and higher wages and benefits at the Alcoa's plant in Acuna, Mexico, across the Rio Grande from Del Rio, Texas. The plant produces auto components and closures.

Belda, a native of French Morocco, who once headed up Latin American operations for Alcoa, took time after the annual meeting to talk with three former Acuna employees, in fluent Spanish.

" There are many ways (to open the plants to union representation)," Belda said after, but they chose the way that doesn't work."

Belda said union organizers took over the plant's public-address system and ran through the plant. "That puts our people at risk. Now they want to be reinstated, but not on my shift," he said.

Belda added that union rules in Mexico prohibited the workers from returning to the plant. "They are upset. I'm upset. They are good workers," he said.

Lou Ransom can be reached at lransom@tribweb.com o en el teléfono 412-320-7886.

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