Alcoa's HQ relocation to NYC no big surprise
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Alcoa's discreet disclosure that it has officially moved its headquarters from Pittsburgh to New York City formalizes a decision Chairman and Chief Executive Officer Alain Belda made years ago.
And it costs Pittsburgh nothing in terms of jobs since many top Alcoa officials have been based in New York for several years and no additional relocations are expected.
Mayor Bob O'Connor, who took office last month, said he had not discussed the headquarters change with Alcoa officials, but is satisfied that -- more importantly to him -- the company is maintaining its local employment base with no plans to change.
"If the top management wants to move, that's certainly their right, but the key thing is their commitment to Pittsburgh is still there," Mr. O'Connor said yesterday.
"They just built a fantastic building here, and they're very active in the community. ... I think they realize the cost of living is much more reasonable here than anywhere else, which is very good for recruiting upper and middle management."
In 1999, when Alcoa quietly signed a 20-year lease for space in the steel-framed Lever House on fashionable Park Avenue, analysts expected sooner or later that the cosmopolitan Mr. Belda, who speaks five languages, would move the company's seat of power to the Big Apple, a home he apparently believes more appropriate and relevant given the global company's far-flung operations.
"They're definitely going to move the headquarters away from Pittsburgh. I think eventually they will make a move to put the headquarters in New York," Prudential Securities analyst J. Clarence Morrison said at the time.
Formal recognition of what was obvious to most came in a one-sentence notice buried in the annual report Alcoa filed earlier this month with the Securities and Exchange Commission. The aluminum maker said its directors amended Alcoa's by-laws "to specify that the principal office of the company shall be in the City of New York rather than Pittsburgh, Pennsylvania."
The disclosure does not trigger any massive shift of jobs from the banks of the Allegheny River to Manhattan.
"Nobody's losing anything," Alcoa spokesman Kevin Lowery said yesterday.
Mr. Lowery said "zero" jobs were affected by the by-law amendment, which he said formalizes what's been reality for five years. About 60 work at the New York headquarters while nearly 2,000 work in Pittsburgh at the $67 million Alcoa Corporate Center and other facilities on the North Shore and at research and business service centers in Westmoreland County.
Alcoa remains incorporated in Pennsylvania, Mr. Lowery said. The Alcoa Foundation, the company's charitable arm, gave slightly more than $1 million of the $39.9 million it donated worldwide last year to Pittsburgh organizations and has contributed about $7.5 million to the region over the last four years.
"New York would be a smidgen of that," Mr. Lowery said.
Although the designation of New York as headquarters was a foregone conclusion in an era when corporate headquarters are no longer the crown jewels they once were, it nevertheless is a blow to Pittsburgh's civic pride. Alcoa was organized in Pittsburgh in 1888 during an era that witnessed the creation of U.S. Steel, PPG Industries, Gulf Oil, H.J. Heinz, Westinghouse and other industrial stalwarts.
Most of Alcoa's top executives have been based in New York for some time, although some of them also maintain offices in Pittsburgh. The executives include Mr. Belda, who succeeded Paul O'Neill as chairman in 2001. Mr. Belda put his Shadyside home on the market the same year and relocated to New York even as an Alcoa spokesperson insisted "we're not moving our headquarters."
On Feb. 15, the company announced that former Australian diplomat Meg McDonald, the new president of the Alcoa Foundation, would be based out of New York. Velma Monteiro-Tribble, the foundation's chief operating officer, will work out of Pittsburgh, the company said.
Observers said Mr. Belda had business as well as personal reasons to gravitate to New York.
New York offers the company's top brass quicker connections to Alcoa facilities in 42 countries. Otherwise, their travels would have to begin and end with a connecting flight from and to Pittsburgh.
Moreover, the company believes New York City offers senior staff better access to investment bankers, analysts, merger and acquisition specialists, foreign consulates and other financial resources Alcoa needs.
It was common knowledge that Mr. Belda, Alcoa's first non-American CEO, did not share his predecessor's affection for Pittsburgh. One former Alcoan said that, as a foreigner, Mr. Belda was not welcomed with open arms when he moved onto the small, tree-lined street in Shadyside in 1994.
"That word got back to O'Neill and Paul was furious," the former employee said when Mr. Belda moved to New York.
Regardless of whether the Shadyside welcome wagon was waiting for him, Mr. Belda's cultural and social preferences resided in New York. A French Moroccan by birth and a Brazilian citizen since 1982, Mr. Belda frequently spent weekends in New York even when he lived in Pittsburgh, preferring the restaurants and social scene there to Pittsburgh's.
First Published February 27, 2006 12:00 am