- After less than half a year on the job
- Laud, praise and thanks for Kleinfeld
- David P. Hess taking over in the interim
- Search for a successor
- Kleinfeld said 52 words
(exechange) — New York, April 17, 2017 — This news came the day after Easter Sunday. Klaus Kleinfeld, chief executive of Arconic, leaves — “by mutual agreement”. As announced by Arconic Inc. in a news release on Monday, April 17, 2017, Klaus Kleinfeld leaves the post as Chief Executive Officer at the specialty metals maker in a surprising move after less than half a year on the job.
No company wants a CEO to flame out in the first months.
The exact date of Kleinfeld’s departure was not specified in the announcement. Obviously, it was an abrupt change.
Arconic Inc. still listed Kleinfeld as Chairman and CEO on its leadership page.
Arconic will undertake a search for a successor.
Kleinfeld’s duties are taken over in the interim by David P. Hess, a former Executive Vice President and Chief Customer Officer for Aerospace at United Technologies Corporation.
Already a director
Hess is already a director of Arconic. Often a board member is a last resort, someone who is turned to in desperation when a company can’t find other suitable candidates. On the other hand, directors-turned-executives represent a blend of outsider and insider.
Having been a director, Hess understands the expectations and dynamics of the board and has knowledge of Arconic’s organization, finances and strategy.
“Without consultation with or authorization by the Board, he had sent a letter directly to a senior officer of Elliott Management that the Board determined showed poor judgment”
The management change is explained as follows. Arconic said in a fairly blunt statement: “Mr. Kleinfeld stepped down as Chair and CEO by mutual agreement after the Board learned that, without consultation with or authorization by the Board, he had sent a letter directly to a senior officer of Elliott Management that the Board determined showed poor judgment.”
“Not made in response to the proxy fight or Elliott Management’s criticisms”
Arconic further said: “Importantly, this decision was not made in response to the proxy fight or Elliott Management’s criticisms of the Company’s strategy, leadership or performance and is not in any way related to the financials or records of the Company.”
“The Board reaffirms the strategy developed under Mr. Kleinfeld’s leadership”
Arconic further said: “The Board continues to believe that under Mr. Kleinfeld’s leadership, the Company successfully executed a transformative vision and improved business performance amid a complex market environment, and the Board reaffirms the strategy developed under Mr. Kleinfeld’s leadership and shared with our investors, customers and employees.”
“Elliott Management’s central objective – a CEO change – has been realized”
Arconic further said: “Elliott Management’s central objective – a CEO change – has been realized at Arconic. With the completion of Arconic’s transformative separation transaction last November, the substantial refreshment of its Board composition with seven of its twelve directors having joined the Board since the beginning of last year, and now the departure of Mr. Kleinfeld as CEO and Chair of the Board, it is clear that the Company has recently undergone a tremendous amount of change.”
“It is Elliott Management’s decision whether to continue to burden Arconic and its shareholders with its highly disruptive and distracting proxy fight”
Arconic further said: “It is Elliott Management’s decision whether to continue to burden Arconic and its shareholders with its highly disruptive and distracting proxy fight, or to support Arconic in facilitating an effective CEO search and a strong transition.”
Precise information about the future plans of Kleinfeld was not immediately available.
Arconic said: “Klaus Kleinfeld, by mutual agreement with the Arconic Board of Directors, has stepped down as Chair and Chief Executive Officer of Arconic and has resigned as a Board member.”
Patricia F. Russo, Arconic’s current Lead Director, has been appointed as Interim Chair of the Board.
Russo has served on the Board since 2008 and has been serving as Lead Director since 2015.
Elliott holds 11.6 percent stake
Elliott Management reported an 11.6 percent stake in Arconic Inc. Elliott Management is an activist investor.
On the job as CEO since 2016
Klaus Kleinfeld has been Chairman and CEO of Arconic, a position he has held since November 2016, when he led Alcoa Inc.’s separation into two publicly-traded companies, Arconic and Alcoa Corporation.
Arconic is a global leader in multi-material precision engineered products and solutions for major markets including airframe structures, aero engines, automotive, commercial transportation and building and construction.
Kleinfeld served as CEO of Alcoa Inc. from 2008-2016 and served on Alcoa Inc.’s Board of Directors from 2003-2016.
Kleinfeld led Alcoa’s turnaround through the economic recession and the collapse of the aluminum market, restructuring the upstream businesses while building up and strengthening the value add businesses that became Arconic.
Before Alcoa, Kleinfeld had a 20-year career with Siemens, the global electronics and industrial conglomerate, based in the U.S. and Germany, where he served as chief executive officer of Siemens AG starting in 2005.
During his tenure, Kleinfeld presided over a dramatic transformation of the company, reshaping the company’s portfolio around three high-growth areas, resulting in an increase of revenues and a near doubling of market capitalization.
Prior to his service on the Managing Board of Siemens AG, Kleinfeld was President and Chief Executive Officer of the U.S. subsidiary, Siemens Corporation, which represents the company’s largest region.
Kleinfeld began his career in a specialized marketing consulting firm working with major international clients. He then joined Ciba-Geigy in Basel, Switzerland, where he was a product manager in the company’s pharmaceutical division.
After joining Siemens in 1987, Kleinfeld rose through the company ranks, leading the largest business in the Medical Group and founding and leading an internal consulting group that played a major role in restructuring the global company.
In addition to serving on Arconic’s board, he is a member of the Board of Directors of Hewlett Packard Enterprise and Morgan Stanley.
Kleinfeld also serves on the Board and Executive Committee of the U.S.-Russia Business Council.
He is on the Board of Trustees of the World Economic Forum and is Vice Chair of the New York City Partnership.
Kleinfeld is also a member of the Mayor of Shanghai’s International Business Leaders Advisory Council, Chinese Premier Li’s Global CEO Advisory Council and the Foreign Investment Advisory Council to the Prime Minister of Russia.
He is an Honorary Trustee of the Brookings Institution and a life member at the Council on Foreign Relations.
Kleinfeld was born in Bremen, Germany, and educated at the University of Goettingen and University of Wuerzburg, both in Germany.
He holds a PhD in strategic management and a master’s degree in business administration.
Kleinfeld and his wife reside in New York and have two children.
Read the full story in the exechange report 17.2017 ($).