Arconic Announces $200 Million of Actions to Mitigate COVID-19 Impact
April 08 2020 - 8:40AM
Business Wire
Arconic Corporation (NYSE: ARNC) announced today that its Board
of Directors approved several measures to further mitigate COVID-19
impacts on the Company.
Chief Executive Officer Tim Myers said, “Arconic was launched
with a strong balance sheet and capital structure. Additionally, we
have built tremendous momentum through 2019 and into this year by
driving improved operational and financial performance. However, as
COVID-19 continues to escalate throughout the world, we are taking
aggressive actions to increase the safety of our employees, respond
to decreasing demand, and preserve the financial strength of our
business.”
The Company is implementing mitigating actions effective
immediately that are estimated to reduce operating costs by
approximately $150 million on an annualized run-rate basis. These
actions as well capital reductions of $50 million will improve the
Company’s financial profile by approximately $200 million. The
following actions will be in effect until market conditions
warrant:
- The CEO’s salary and the Board of Directors’ annual cash
retainer will be reduced by 30%.
- Senior-level management will incur a 20% salary reduction and
all other salaried employees will incur a 10% salary
reduction.
- The salaried workforce will be restructured targeting a 10%
reduction.
- Adjusting to our customers’ reduced requirements, our Tennessee
and New York facilities have been idled until demand returns.
- All other US-based rolling and extrusion facilities will
decrease production and operate with a reduced labor force through
shortened work weeks, shift reductions, layoffs, and the
elimination of temporary workers and contractors.
- All rolling mill facilities in Europe, China and Russia will
modify schedules, adjust work hours, lower costs, and delay
raises.
- The 401K match program will be suspended for salaried
employees.
- Capital expenditures will be reduced by approximately $50
million or approximately 30%.
“The Board supports management’s plan to swiftly and actively
mitigate the impact from COVID-19,” said Frederick “Fritz”
Henderson, Chairman of the Board. “We are taking these actions as
well as others as necessary to preserve our financial strength for
the long-term benefit of all of our key stakeholders,” he
added.
Mr. Myers said, “Arconic employees have strong values that have
been proven time and again, and their safety is our highest
priority. We are heightening measures at all of our locations to
maintain strict hygiene, increase social distancing, and enable
employees to work remotely where possible.” He added, “I am
confident we will overcome present challenges to achieve
sustainability and industry-leading growth well into the
future.”
About Arconic Corporation
Arconic Corporation (NYSE: ARNC), headquartered in Pittsburgh,
Pennsylvania, is a leading provider of aluminum sheet, plate and
extrusions, as well as innovative architectural products, that
advance the ground transportation, aerospace, industrial, packaging
and building and construction markets. For more information, visit
www.arconic.com.
Forward-Looking Statements
This release contains statements that relate to future events
and expectations and as such constitute forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995. Forward-looking statements include those containing such
words as “anticipates,” “believes,” “could,” “estimates,”
“expects,” “forecasts,” goal,” “guidance,” “intends,” “may,”
“outlook,” “plans,” “projects,” “seeks,” “sees,” “should,”
“targets,” “will,” “would,” or other words of similar meaning. All
statements that reflect Arconic Corporation’s expectations,
assumptions or projections about the future, other than statements
of historical fact, are forward-looking statements, including,
without limitation, forecasts and expectations relating to customer
demand; statements and guidance regarding future financial results
or operating performance; reduction in operating costs and capital
expenditures; statements regarding future actions to mitigate the
impact of COVID-19; and statements about Arconic Corporation’s
strategies, outlook, business and financial prospects. These
statements reflect beliefs and assumptions that are based on
Arconic Corporation’s perception of historical trends, current
conditions and expected future developments, as well as other
factors Arconic Corporation believes are appropriate in the
circumstances. Forward-looking statements are not guarantees of
future performance and are subject to risks, uncertainties, and
changes in circumstances that are difficult to predict. Although
Arconic Corporation believes that the expectations reflected in any
forward-looking statements are based on reasonable assumptions, it
can give no assurance that these expectations will be attained and
it is possible that actual results may differ materially from those
indicated by these forward-looking statements due to a variety of
risks and uncertainties. Such risks and uncertainties, include, but
are not limited to: (a) the possible impacts and our preparedness
to respond to implications of COVID-19 and (b) the other risk
factors summarized in Arconic Corporation’s Form 10-K for the year
ended December 31, 2019 and other reports filed with the U.S.
Securities and Exchange Commission. Market projections are subject
to the risks discussed above and other risks in the market. The
statements in this release are made as of the date of this release,
even if subsequently made available by Arconic Corporation on its
website or otherwise. Arconic Corporation disclaims any intention
or obligation to update publicly any forward-looking statements,
whether in response to new information, future events, or
otherwise, except as required by applicable law.
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version on businesswire.com: https://www.businesswire.com/news/home/20200408005390/en/
Investors Jason Secore Shane Rourke (412) 315-2984
Media Tracie Gliozzi (412) 992-2525
Tracie.Gliozzi@arconic.com
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