Arconic Names John Plant CEO to Oversee Review After Spurning Apollo
(Bloomberg) -- Arconic Inc. named Chairman John Plant to serve as chief executive officer, ousting Chip Blankenship after just a year at the embattled manufacturer.
Plant, the company’s fourth CEO since early 2017, is expected to serve in the top post for a year, the maker of aerospace and automotive parts said in a statement Wednesday. Elmer Doty, a director, has been named chief operating officer, while Arthur Collins Jr., also on the board, becomes lead director.
The management overhaul deepens uncertainty at Arconic, two weeks after the company backed out of late-stage talks to sell itself to Apollo Global Management -- a move that sent the shares tumbling the most in eight months. Arconic plans to provide an update on its strategy and portfolio review when it reports earnings on Feb. 8.
Arconic Has Had Four CEOs in Its Short Life
John Plant February 2019 - Present Chip Blankenship January 2018 - February 2019 David Hess April 2017- January 2018 Klaus Kleinfeld November 2016 - April 2017
“We find the timing of today’s release perplexing and question why it wasn’t done in conjunction with earnings later this week,” Jefferies analyst Martin Englert said in a note to clients. He said it was “reassuring,” however, that the company stuck with its 2018 profit forecast.
The move is another detour in the turbulent two years since Arconic split from aluminum maker Alcoa. Arconic parted with its first CEO amid a proxy battle with Elliott Management Corp. and faced scrutiny for its connection to a deadly apartment fire in London.
The shares were little changed at $18.83 at 12:44 p.m. in New York. Arconic had plunged 29 percent in the 12 months through Tuesday as the company grappled with poor performance and rising aluminum prices. A Standard & Poor’s index of industrial stocks fell 1.4 percent over the period.
Arconic tumbled late last month after rejecting a sale of the company, saying no offers served the best interest of shareholders. Apollo had been widely expected to forge a deal, after reports that it had topped bids from other private equity firms.
The collapse of the Apollo talks added pressure on Arconic to step up its game internally and to move forward on a previously announced sale of its building-systems unit. The company is “focused on continuing to identify and implement operational improvements and other potential strategic initiatives,” Collins said in the statement.
The management changes indicate Elliott’s continuing influence on Arconic. The hedge fund led by Paul Singer had supported the appointment of Plant to Alcoa’s board prior to the split, and Doty became a director in 2017 after Elliott was given board seats to settle a proxy fight with Arconic.
An Elliott spokesman declined to comment on Wednesday’s announcement. The firm is Arconic’s largest shareholder, with a 10.74 percent stake.
The manufacturer has struggled with turnover at the top. Klaus Kleinfeld, Arconic’s CEO when it split from Alcoa in late 2016, stepped down in April 2017 after the board said he used poor judgment in interactions with Elliott. Arconic was led by interim chief David Hess until Blankenship was appointed.
Blankenship, a former General Electric Co. executive, had explored the recent possible sale and moved to cut costs, such as a plan to relocate the company’s headquarters out of New York.
Plant thanked his predecessor for “stabilizing and guiding the company over the past year and positioning the company for improved operations and significant value creation.” Plant, who has served on Arconic’s board since 2016, was CEO of car-parts supplier TRW Automotive for a dozen years to 2015.
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