klaus kleinfeld alcoa

Alcoa Inc (NYSE:AA) Chairman & CEO Klaus Kleinfeld spoke with FOX Business Network’s (FBN) Liz Claman about his thoughts on tapering. Kleinfeld said, “we are not afraid of that tapering environment at all. In fact, I would very much look forward to that and believe that would be a much more natural and probably an environment that feels a little better than it even does today.” Kleinfeld also commented on the debt ceiling saying, “I think that we should really work on not having it come to a shutdown” and that “the last thing that we need in a time where the economy is just recovering is to send signs of lack of confidence, volatility out there. That’s what we should avoid.” When asked about leaving the Dow Jones Industrial Kleinfeld said, “we continue our strategy.”

Excerpts from the interview are below.

On the possibly of a government shutdown:

“Well, I think that we should really work on not having it come to a shutdown and if at all necessary, then do it as quickly as possible.  But let’s avoid it. And I’m more concerned about the secondary effects, I mean the things that you see today.  I mean the question of how does that affect confidence in an economy that’s just recovering, you know, and I think what we should focus on – I mean in the short-term, lift the debt ceiling, and, at the same time, work really, really hard on real fiscal reforms, you know.  I think that’s what businesspeople want and that’s what businesspeople would do and would highly, highly recommend in this situation, because the last thing that we need in a time where the economy is just recovering is to send signs of lack of confidence, volatility out there. That’s what we should avoid.”

On whether Alcoa is ready for a taper:

“I see it very simply. Look, I mean the low interest rate environment has created some extraordinary impacts. We have seen new types of investors coming on that impacted our market, at the same time what we will see is the moment the interest rates will go up. The Federal Reserve boards all around the world only allow that to happen when you see the general economic activity going up, so demand will increase, interest rates will come up, so this is basically leveling out, so we are not afraid of that tapering environment at all. In fact, I would very much look forward  to that and believe that would be a much more natural and probably an environment that feels a little better than it even does today.”

On Alcoa leaving the Dow Jones Industrial:   

“We continue our strategy, we have a very clear strategy basically increase our value-added products, innovate more, innovate faster, get new applications out there. At the same time we are redoing our upstream, our commodity business by coming down on the cost curve, shutting down old capacity and bringing online the lowest cost capacity that we are building with a partner in Saudi Arabia, and that works. We see it reflected in the numbers. It’s one of the biggest recessions that our industry has seen and we are doing relatively fine in this.”

On the future of Alcoa:

“I see a company that will continue to reinvent itself. I see a company that has a strong foundation of what we invest today will basically be the growth of tomorrow.”