Belda, Alain 1943–
Chairman, chief executive officer, and president, Alcoa
Born: June 23, 1943, in Meknes, Morocco.
Education: Universidade MacKenzie, BA, 1965.
Family: Married Haydee (maiden name unknown; a philanthropist); children: at least two.
Career: BASF, 1965–1969, accountant; Alcoa Aluminio (Brazilian subsidiary of Alcoa Inc.), 1969–1982, financial planner; 1979–1994, president; Alcoa Inc., 1982, vice president; 1991–1994, president of Latin American operations; 1994, executive vice president; 1995, vice chairman; 1997–1999, president and COO; 1999–2001, CEO and president; 2001–, chairman, CEO, and president.
Awards: Person of the Year, America, Brazilian American Chamber of Commerce, 1999.
■ Alain Belda had seemed a safe choice when he was tapped to become Alcoa's president and chief operating officer in 1997: he was a company man through and through, having spent 30 years climbing Alcoa's corporate ladder. Rather than maintaining the status quo, however, he proved to be an advocate of change, reshaping Alcoa from a traditional economic model into one that more closely resembled modern high-tech companies than the commodities company Alcoa had long been. He spoke five languages—English, French, Italian, Portuguese, and Spanish—and had a firm understanding of the global marketplace. Evolving out of his international experience was his vision of Alcoa as a global entity at home in many different cultures.
Belda was born to a Spanish father and a Portuguese mother in what was then called French Morocco. His father was skilled at turning failing companies around and traveled the world doing so. When Belda was three years old, his family moved to São Paolo, Brazil; when he was 13, his father's work took the family to Canada; when he was 17, his father was killed in an auto accident. Belda and his family returned to Brazil, where he eventually became a naturalized citizen in 1982. When he accepted the post of executive vice president at Alcoa in 1994, which required him to work in the United States, his wife and children remained in Brazil, although two of his children attended Brown University in Rhode Island. Belda often said that the United States was the only place where he could rise so high in a corporation, declaring American business to be a "meritocracy."
It was by chance that Belda had his first opportunity with Alcoa in Brazil. In 1969 he had a lunch appointment with his younger brother, Ricardo, who sent word that his work at Alcoa Aluminio, Alcoa's Brazilian subsidiary, would keep him late. Belda met his brother at the Alcoa Aluminio office and, while there, applied for a job in the financial department. Alcoa Aluminio offered to double the salary Belda was receiving from the German chemical company BASF, and he accepted the offer.
Belda worked in both finance and planning for Alcoa Aluminio for 10 years before being elevated to president, becoming the first person from outside the United States to hold that post. His language skills were put to good use when he was placed in charge of Alcoa's Latin American operations in 1991. He resisted assignment to posts in the United States, preferring to remain in his beloved Brazil, but in 1994 he took the next big step in his career and accepted the post of executive vice president at Alcoa, which required him to move to Pittsburgh, Pennsylvania.
PHILOSOPHY AND VISION
When he was later appointed by Alcoa's board of directors to the offices of president and COO, Belda immediately began introducing new business practices to the world's largest producer of aluminum. A far-reaching change was the introduction of the Alcoa Business System (ABS), which was derived from the Toyota Production System (TPS), with modifications by Belda and his staff. The most significant aspect borrowed from the TPS was the focusing of production on specific items demanded by customers. Until then, Alcoa had followed a typical commodities-company model in which it produced as much of its primary product as possible, sold what it could in the industrialized world for a profit, and then dumped what was left on the rest of the world's markets. This often led to Alcoa merely breaking even rather than turning a profit. In the ABS introduced by Belda, Alcoa's salespeople learned what their customers wanted, and Alcoa produced exactly that and nothing more.
Belda also expanded on the TPS model by emphasizing respect for all employees and for their opinions. If Alcoa were to succeed at production on demand, it would need to be nimble in its manufacturing, deftly shifting emphasis from one product to another. When management listened to its workers, it could develop better ways of shifting gears. As part of this strategy, in 1997 Belda introduced a three-year plan aimed at cutting production costs by $1 billion; by 2000, through worldwide cooperation from employees, Alcoa had cut costs by $1.1 billion. At that point Belda introduced a second three-year plan with emphasis on the ABS, achieving another $1 billion in savings over the course of the year. For his part, Belda took a 40 percent reduction in total compensation from 2000 to 2001 and another 20 percent reduction from 2001 to 2002.
The American and international marketplaces for Alcoa's products were chaotic during the 1990s and into the 2000s. From Belda's point of view, the ABS, though successful, was not enough to keep Alcoa economically sound. Competitors such as Alcan were expanding their shares of the marketplace; meanwhile, the dumping of Russian aluminum that had piled up unused during the cold war drove down prices. Where Alcoa would typically step up production and dump aluminum on the marketplace in order to prevent customers from straying, Belda instead took a page from the high-tech industrial giants such as Intel and heavily invested capital in acquisitions and manufacturing.
The purchase of Cordant Technologies for $2.9 billion offered Alcoa new avenues for increasing revenue, and Cordant's sales force brought along an extensive list of clients who became new customers for all of Alcoa's products. In August 1999 Belda declared that Alcoa would pursue a hostile takeover of Reynolds Metals Company, which succeeded on May 3, 2000, when Alcoa bought Reynolds for $4.8 billion in cash and stock; Reynolds remained a separate corporate entity within the Alcoa family. Reynolds's emphasis was on consumer products such as aluminum foil, giving Alcoa closer contact with end users. The acquisition also ensured that Alcoa would remain the world's foremost producer of aluminum products, harboring 15 percent of world revenues.
In 1999 Alcoa's net revenue surpassed $1 billion for the first time, but integrating acquisitions into the ABS soaked up a portion of these funds. In the early 2000s Alcoa had over 127,000 employees, with business locations expanding to 40 countries. Belda addressed labor unrest by establishing Alcoa's Ethics and Compliance Program, with toll-free phone numbers set up for use by any employee. Further, Belda established long-term goals for effecting environmental changes by the 2010s that stimulated 40 percent reductions in airborne pollutants from Alcoa plants worldwide as of 2004.
See also entry on Alcoa Inc. in International Directory of Company Histories.
sources for further information
"Alcoa's Business Ethics and Compliance Program: A Global Investment," Ethnic News, Fall 2003.
Arndt, Michael, "Alcoa Wants One of These, and One of Those," BusinessWeek, September 11, 2000, pp. 63–68.
Belda, Alain, interview by Michael Arndt, "Thinking Young at Alcoa: An Old Economy 'Classic,'" BusinessWeek, June 28, 2000.
—Kirk H. Beetz