The Benefits of Recycling Aluminum with Alcoa’s Kevin Anton
August 8, 2011
You may not think that an accounting degree and accounting background is a typical path to becoming a Chief Sustainability Officer and one of the world’s foremost experts on aluminum, but Alcoa’s Kevin Anton took just that path.
Anton spent three-plus decades in finance in the metals and mining industry, but it wasn’t until the recent financial crisis that he really started to think about his legacy. Instead of leaving his perch at Alcoa to try a new venture, the CSO position was created specifically for him. It allowed Anton just the kind of positive legacy he was looking to create.
Anton stresses that sustainability is not a new trend at Alcoa, but he recognizes that the company only recently linked “the green agenda of sustainability to the green agenda of business.” More than a year after taking the CSO position, Anton has moved the company down a greener path.
It all starts with our daily needs for aluminum products. Soda cans are only the tip of the iceberg. Aluminum, also known as the “wonder metal,” is used in all sorts of infrastructure and buildings, as well as transportation, airplanes and much more.
“It’s the perfect package,” Anton says. “It’s infinitely recyclable. That water can you drink out of can be recycled in 60 days, back on the shelf, back in your hand. So, the soda can you had at your Fourth of July picnic can actually be back [in time] to use for your Labor Day picnic.”
It doesn’t stop there. Aluminum is beneficial in the transportation industry, increasing fuel efficiency and lowering costs wherever it is implemented. And again, it can be recycled over and over. Anton also cites the architecture industry as the fastest growing segment that has been turned on to aluminum, helping to lower energy costs and secure LEED certification points.
One of the biggest changes Anton has helped to implement at Alcoa has been employee engagement. Nearly half of Alcoa employees regularly volunteer in their communities, helping to strengthen the company’s bond with the public. Furthermore, the focus has turned to waste and energy minimization. Anton won’t rest until Alcoa becomes a zero-waste-to-landfill company, and he is constantly stressing ways to cut back energy usage throughout the company.
Anton’s green quest will continue as he hopes to help the American aluminum recycling rates tick upward, as well as increase energy efficiency and reduce the footprints of Alcoa’s facilities worldwide.
JOHN SHEGERIAN: Welcome back to Green is Good, and we’re so honored today to have our friend, our business partner, and the Chief Sustainability Officer of Alcoa, Kevin Anton, on Green is Good. Welcome, Kevin Anton, to Green is Good.
KEVIN ANTON: Thank you for that, John. I appreciate it.
JOHN SHEGERIAN: Kevin, you are one of the most fascinating friends that I’ve ever had the great pleasure to get to know in my life. You’re just, first of all, a wonderful human being to start with, but also one of the most knowledgeable people in the world on aluminum. In fact, some of your colleagues at Alcoa have whispered in my ear, “Do you know, John, you have the most knowledgeable human being on the planet with regards to aluminum sitting on your Board of Directors at ERI?” So, I just want to say thank you, Kevin. I know how busy you are, but before we get going today, you have one the most fascinating business journeys and life journeys to share how you became the Chief Sustainability Officer and your evolution at Alcoa. Can you share that with our listeners first?
KEVIN ANTON: Sure, John. It’s definitely a nontraditional background for a Chief Sustainability Officer, but I think it’s going to be a model that is followed by more companies going forward. I’ve got an accounting background, an accounting degree, and I’ve worked in metals and mining, three different companies over 32 years, always in accounting, finance, mergers and acquisitions, strategy work. I headed up Alcoa’s sales group for the commodities side of the business, metal trading, but always very, very financial-oriented type work. Then after we came out of the financial crisis, I started a dialogue with Klaus Kleinfeld, our CEO, about maybe it was time to leave Alcoa and go do some different work. As one starts to think about your legacy, do you want your legacy to be, “He was a great accountant,” “He was a great metal trader,” or do you want your legacy to be you’ve made a bigger impact on the world? As Klaus and I, over a series of months, were having that dialogue, he ultimately came back and said, “Kevin, instead of leaving Alcoa, because I don’t want you to leave, why don’t you take on the new role of Chief Sustainability Officer? You can do all those things that you want to do. You can make a positive impact on the world. You can make the company a better company, and still stay with us and do it.” It was the perfect answer. It met an Alcoa need, it allowed me to stay with the company, and it allowed me to have a big role in pushing forward both the sustainability agenda for Alcoa and the sustainability agenda for the industry. I had the privilege in the past of being the Chairman of the U.S. Aluminum Association, so I have a platform to help drive the agenda, not just for Alcoa, but for the industry in total.
JOHN SHEGERIAN: After 123 years, were you the first Chief Sustainability Officer at Alcoa?
KEVIN ANTON: Yes. Sustainability has been part of Alcoa for a long period of time. It started in Alcoa with safety, then worrying about the environment, and then thinking about our product, but we always had it segmented in those siloes, and we never actually looked at sustainability as an overall program, bring it together, drive competitive advantage, link the green agenda of sustainability to the green agenda of business. That’s what those 32+ years in the finance and the commercial arena allows me to see across the different siloes, and put something together that works.
JOHN SHEGERIAN: You’ve now been the CSO of Alcoa for just about year. Can you share with our listeners where you’re going on the sustainability front and where you’ve been at Alcoa, and where you’re going? Because there’s so much, and I got the pleasure to learn it along the way because of our friendship and business relationship, but I’d love our listeners to hear all the amazing things you’re doing at Alcoa with regards to sustainability.
KEVIN ANTON: John, I think first of all, you start talking about working for a company with a greater purpose. You start to think about Alcoa, and you look at where in your life do all the aluminum products touch you. Let’s start with the simple thing of the soda can, or as I’m drinking out of right now, canned water. It’s the perfect package. It’s infinitely recyclable, so that water can that you drink out of can be recycled in 60 days back on the shelf and back in your hand. The soda can that you have for your 4th of July picnic can actually be back and you can use it for your Labor Day picnic. When you recycle aluminum, you save 95% of the energy that would use to make brand new aluminum. Contrast that with plastic. A plastic bottle basically gets used once. Two percent of plastic bottles get recycled back into plastic bottles. Some portion of them get recycled back into other products and downgraded, like carpet fibers or carpet backing and other lower value things, but that can only happen once. Aluminum we get to recycle it infinitely, and it doesn’t lose any of the characteristics. We’re really touting the aluminum can and making that showcase product and trying to reinvigorate it. We’re shaping technology so we can actually make the Coke bottle, now, out of aluminum. Then you shift into the transportation sector, and you look at what we do there. Alcoa’s got a lead position in truck trailer business, where if you look at those shiny aluminum wheels going down the road, those are most likely Alcoa aluminum wheels. Those aluminum wheels will save fuel for the trucker, reduces its weight which allows them to carry more payload. When a truck driver buys aluminum wheels, it will have a payback in less than two years, based on increased revenue, bigger payloads, fuel economy, lower greenhouse gases. You can take that same story and bring it into the automotive sector. How are the automotives going to work today to meet the new CAFE standards, the new fuel economy standards that are coming down the pike? We think that the most effective way to do it, the most cost effective and the most attractive to the consumers, is by doing it by adding more aluminum to the cars. For every pound of aluminum you add to a car, you reduce the car’s greenhouse gas footprint by 20 pounds. Then it shifts over into the building and construction market, the new innovative products we’re bringing in there. It’s things like managing light, helping with our products, help get light deeper and deeper into the building so you can use natural light instead of artificial light, better insulation values within our products. We can hit all the needs of the modern architect to make an energy-efficient, green building. John, you know this because you’re very active in this space. I think you can look in the U.S. and you see which is the leading constituency driving the green agenda, and I’d have to put the architects right up on the top. They are very switched onto what it takes to be green with the whole LEED certification, and we bring out new and innovative products on a continuous basis to meet their needs. It’s just fantastic to watch.
JOHN SHEGERIAN: Kevin, you bring up some great points. I want us to go back, also, to internally and externally with regards to Alcoa. You have shared with me some wow statistics over the last year-and-a-half with regards to Alcoa. First of all, your company has been on the Dow Jones Sustainability Index for nine years now. Right there, prior to you even becoming the CSO and driving sustainability further into the future at Alcoa, as you’ve said before, it’s been in the DNA of Alcoa as a legacy. When you talk about sustainability and people, planet, and profits, talk a little bit about the business case internally at Alcoa and some of the real dollar signs that show up when sustainability is implemented throughout the practice, throughout your company.
KEVIN ANTON: You’re matching up the business case, you’re matching up employee engagement. What we’re trying to do is get the whole Alcoa workforce engaged in thinking around sustainability. John, you know we use the broadest definition of sustainability. Let’s first start with being a valued member of the community where we operate. Alcoa wants to make sure and has a constant conversation with the leaders in the whole community around where our plants are and become a trusted member and a valuable member of that community. One of the ways we do that is encouraging volunteerism. Each October, we make that Alcoa Volunteer Month. Last October, we had 49% of the Alcoa employees volunteer in a civic activity in their community. That’s great. We do it once a month. But what’s the follow on from that? People get in the habit of volunteering. It just becomes natural, and it stops being a once a year in the month of October, and it ingrains itself. Now we have another way where we can have a conversation with our community. We’ve got our employees engaged there. We also focus our employees on how do you minimize waste. There are activities across the board saying how do we get Alcoa to a zero waste in the landfill company? We deploy that across the company. How do we make sure our employees stay safe? Alcoa’s safety is our core value, so we constantly engage the workforce there. Energy efficiency is something everybody can do, from turning off the lights to making sure the door is closed and the furnaces that we operate in, to making sure we use the least possible miles when we’re shipping our products. Energy efficiency is a huge area across Alcoa. What we did was we tied intensive compensation in the company to reaching our energy efficiency and greenhouse gas reduction goals. We put our money where our mouth is in driving results. Are we perfect at this? No. Do we get better and better each day and each month? Yes, and we’re making a positive impact, and it gives us another way to have a great conversation with our employees and making sure we have that alignment we need with the workforce.
JOHN SHEGERIAN: I love it. For our listeners who just tuned in, we’ve got Kevin Anton, the Chief Sustainability Officer, on for a special Green is Good, a whole hour with Kevin talking about sustainability and everything that he’s doing at Alcoa and Alcoa is doing, not only in the United States, but in the 32 countries around the world where they operate with all the great suppliers and great brands that they work with. If you want to learn more after or during the show, right now Mike’s on his laptop and I’m on my iPad. Go onto alcoa.com and click onto either on the top toolbar Environment or Sustainability, and there are some great, great stories about what’s going on at Alcoa and everything that they’re doing with regards to sustainability in this space. Kevin, let’s go back to aluminum, the miracle metal. Why is it really called the miracle metal?
KEVIN ANTON: It’s very unique, John. If you look at the attributes of the product, it’s great on conductivity, so it conducts heat when you want it to conduct heat and cold, it also conducts electricity very well. It’s very formable, very malleable. We can do joining technology on it. It’s lightweight. It’s strong. So, it’s got all those wonderful characteristics, but I think the one that I’m always most impressed with is how easy it is to recycle. Again, if you’re talking about a plastic bottle and you’re trying to recycle it, you can’t get the chemical and the molecular structure back to what you need it to be to make another bottle, and you start to degrade the plastic over time. I’ve heard some smart people call plastic the permanent problem. It has issues that don’t go away, and you can’t continuously use it. If you’re talking about steel, steel can be recycled, but it takes significant energy to recycle steel. Aluminum, as I said before, it’s a fraction of the energy, 5% of the energy required to remeld it and reform it into a brand new aluminum product, and there’s no degradation of the structure. You can be an aluminum can one month, and the next thing you know, you can be in an engine block or you can be in a window frame of you can be in a truck wheel. So, it’s very, very interchangeable, very effective. It is the perfect, modern, space-age material.
JOHN SHEGERIAN: It is the infinite recyclable. What I learned from you, which I want you to share this wow number with our listeners, is of all the aluminum ever produced in the world, how much is still being used right now?
KEVIN ANTON: Seventy-five percent of all the aluminum ever produced today is actively in use. There’s a chance, John, when you go and you get that soda can when we’re done here, that some of that aluminum might have been the first aluminum Charles Martin Hall discovered 125 years ago.
JOHN SHEGERIAN: That is just great. It really is the miracle metal. Kevin, I met you now about a year-and-a-half ago at one of your great recycling facilities in Alcoa Tennessee. Can you share with our listeners the recycling that you do at Alcoa here in the United States and around the world, and how vast your operations really are and how really recycling is part of the Alcoa DNA.
KEVIN ANTON: Yes. John, recycling is big for us. We’ve done it for business reasons, we’ve done it for environmental reasons. We just think it’s very important that we don’t fill landfills up with cans. We go about recycling in a number of ways. First of all, we help establish the whole infrastructure in this country for recycling cans. You and I are old enough to remember when there used to be an Alcoa tractor-trailer in the Boy Scouts and the church groups used to collect the cans that way. It’s obviously matured beyond that. We help build the infrastructure. We built the infrastructure in our plants to very effectively and quickly process the cans. It’s wonderful. In any given year, globally, Alcoa will recycle about 600,000 tons of aluminum scrap. It makes us one of the largest aluminum scrap recyclers in the world. We’re proud of that. We’re not proud of everything. Globally in the world, just under 70% of aluminum cans are recycled. If you look in places like Brazil, if you look in the Scandinavian countries, there’s a lot of places around the world where that recycle rate is between 95 to 100%. Then you look at our country, and John, unfortunately, the recycle rate in our country in 2010 was 58% of aluminum cans. What does that really mean? That means that about a million tons of aluminum was thrown into landfills that didn’t need to be thrown into landfills. If you put an economic value on that with today’s commodity prices, that value is worth about $2 billion. Can you imagine? You just look at it from a whole broad array. Just think about people in this country who are underemployed, don’t have opportunities, looking for jobs, what have you, and this country still has the ability to throw away $1 billion. In my mind, that’s unconscionable. When I was Chairman of the U.S. Aluminum Association, we first came out with an Alcoa goal to raise that recycle rate to 75% by 2015, and then using the pulpit of my chairmanship of the Aluminum Association, was quickly able to get the rest of the industry to come around and sponsor that goal too, so that’s now a total industry goal to change the recycle rate to 75%, not just an Alcoa goal. There are lots of good efforts going there, but we need to change behavior, and a forum like you’ve provided me today is great, John, so I can help deliver that message out to a broader constituency, that there’s no reason to not recycle aluminum cans.
JOHN SHEGERIAN: That’s just a great message. I’m so glad you shared that because not only is the show, Kevin, as you know, heard in the United States, but it’s heard around the world. We have listeners from Shanghai to Seoul to Mumbai and Paris, so I’m so glad you’re sharing that message with our listeners. Talk a little bit about what Alcoa does to drive the recycling rates, and talk about the world’s biggest recycling facility that Alcoa actually operates.
KEVIN ANTON: First of all, to change the recycle rate. It’s behavior based is what we need to work on, making people think twice before they ever throw out an aluminum can. We’ve gone at it a couple ways, and some of them are fun. We now have an app on the Apple iTunes store called Aluminate, and you can download it and in addition to a very amusing video that’s embedded in it, the app uses 1800Recycling.com’s search engine. It uses the GPS positioning of your iPhone and tells you where the closest place to recycle your can is. It takes away the excuse of not being able to find a place to recycle your can. I’m sitting here in Manhattan. I can bring it up and within a couple blocks of the office here, it will give me a dozen different places I can effectively get rid of the cans. That’s great. We recognize there’s a younger generation that actually probably pays more attention to sustainability than what my generation did. We recognize the extent you can capture and change the behavior of folks who are younger, we try to do that. We work programs in elementary schools to the Aluminum Association. We have a program called Cans for Causes, where we help non-profits organize can drives. The one we’re particularly proud of is we work with Keep America Beautiful, and Alcoa’s foundation sponsored Recycle Mania, where we went onto 600 different university campuses around the country last year, and we’ve done this for the last couple of years. We sponsor recycling competitions. The whole idea there is to get the recycling, and it’s not just the aluminum cans, it’s everything that we want folks to recycle, but it gets the dialogue going. It turns it into fun, turns it into a competition, and makes recycling a learned behavior. So, we’re pretty proud of all that, but obviously, lots more to do.
JOHN SHEGERIAN: True. As you’ve said and what we’ve discussed a little bit before is not only are you helping to increase the recycling rates and changing people’s mindsets and behavior, but you also are a huge recycler, including the world’s biggest recycling facility in Tennessee.
KEVIN ANTON: Yes. Just outside of Knoxville, Tennessee, where Alcoa has one of its large rolling mills that actually makes the body part of the aluminum can, we invested about $25 to 30 million over the last couple years. Even through the economic crisis, we still invested the money, and we do have what we believe is the largest and the most state-of-the-art recycling facility. We can recycle 40 to 50 million pounds of cans a month in the facility in a very energy-efficient, safe way, and get those cans right into the shelf as soon as possible.
JOHN SHEGERIAN: That is just great. As I said before, Kevin, I’m on my iPad, too, and Mike’s on his laptop here, and as we know, in our lifetime, in our children’s lifetime, the consumer electronic world has just exploded. The technological revolution in the United States and around the world is upon us, and continuing to grow with velocity. What does it look like with regards to Alcoa’s engagement with the consumer electronic world in terms of selling your products and also being part of the sustainability stakeholder loop in terms of recycling electronics?
KEVIN ANTON: Think about it first, John. We all have our gadgets in front of us. We can’t live without them anymore, but they have incredibly short lifespans. They’re not quite as short of a lifespan as an aluminum can, but it’s not unusual for these devices to turn over in 12 to 18 months. If you start thinking about it in those terms, and we’ve already dubbed plastic the permanent problem, the manufacturers recognized too that they needed a more sustainable material to make their devices out of. We’ve seen over the past six years a phenomenal growth of aluminum in consumer electronics. We have double-digit growth, and we’re projecting that for at least the next several years, to see double-digit growth in aluminum penetration. What does it do for the consumer electronics companies? First of all, it gives them a highly recyclable product, and we all love that. Other things it does, it just feels cool. It looks good, it feels cool, there’s a palate of colors that are available to the designers that they love, so it does that for them, and then a little-known fact is it helps performance of the devices. I talked earlier on that aluminum conducts heat very well, and one of the issues in designing effective consumer electronics today is a way to dissipate the heat from the device. That’s obviously why you have a fan in a lot of CE devices. The aluminum can fill the role of the fan and eliminate it. What does that allow you to do? Make your device skinnier, maybe totally eliminate the fan. Now when you’ve eliminated the fan, you’ve extended your battery life, so you can give more battery life or a smaller, lighter battery. So, the designers love the aluminum. That’s why they’re liking it. We said, “OK, if Alcoa is going to be a sustainability company and we’re going to help promote the use of aluminum in consumer electronics, we have to help create the solution for recovering the aluminum at the end of its life and making sure it doesn’t end up in a landfill and it does become infinitely recyclable.” John, that’s where you and I met and started to have a dialogue and say Alcoa’s got to participate in the e-waste recycling business. We weren’t exactly sure how to do it. We scoured the country and said, “How should we participate?” Ultimately, the story comes down to we looked and saw that ERI was in the premier space there. We liked the practices, we liked the leadership of John and his team, and as a result, we invested in ERI. But we just thought that there was an obligation, if we’re going to promote our material in this market, we can’t allow 80% of it to end up in landfills. So, we have to get active, help develop the infrastructure, like we did with the aluminum can, to make sure that consumer electronics are responsibly recycled. From there, it’s just been wonderful over the past couple months, John.
JOHN SHEGERIAN: Thank you very much, Kevin, and thank you for that investment, and thank you for all that you’ve done for ERI. I want to also migrate that part of the discussion. You’re now in the leadership with that investment and all that you’re doing, truly, you are in the leadership role, again, to help develop that infrastructure like you did with the can. Talk a little bit about, though, the other side of the coin. You work with all these amazing brands around the world with regards to consumer electronic OEM type companies. Is there an increased request by them for your recycled aluminum product, so they could then turn around to their constituency and talk about selling products that have more recycled content?
KEVIN ANTON: Yes. That’s an emerging trend, where people are talking about recycled content. Even internally, we have a debate about whether we should be talking about recycled content or just the recyclability. We end up having a dialogue about both. The consumer is going to call for a product with higher recycled content, Alcoa responds to that, and we now have a product line with a guaranteed 20% aluminum recycle rate. At the same point in time, we just continue to educate and drive home the recyclability of the material, too. It’s a two-pronged approach. I definitely want to meet the requirements of our customer and our customer’s customer.
JOHN SHEGERIAN: With regards to your involvement now in the electronic waste recycling industry, you also took another step. Can you share a little bit about, again, going to the highest standard always, and your association with the Basel Action Network?
KEVIN ANTON: Sure, John. When we were doing our due diligence in looking to see where do we want to place our bet and where do we want to invest in the e-waste business, we did a lot of work and we said, “Hey, we’ve got a big Alcoa brand here, and we need to be careful with it, and we need to make sure that whomever we team up with is the best of the best.” We started saying, “OK, now, what are the external folks doing?” We looked around to see who were the certifications, and we looked at what we thought the most viable and the most important certification was actually coming from the Basel Action Network. They’re working at the nexus of human rights and the environment. They want to make sure that consumer electronics and other things are responsibly recycled and not sent off to developing countries to be processed in unsafe ways and have large quantities of things ultimately ending up in landfills. That’s the dime version of it. It’s a very, very serious well thought out protocol that the Basel Action Network has. They go through and then certify that the e-waste companies are actually living up to it. We found great comfort that ERI is one of the founding members and participants in the Basel Action Network, and now correct me if I’m wrong, John, but I believe all the facilities have now been certified. Then we looked at it and said there’s also the Basel Action Network in addition to the e-waste companies, they also have a program for the e-waste generators, like Alcoa is. We looked at that program and said if Alcoa is going to hold ERI to that standard and invest in them because they reached that standard, isn’t it important for Alcoa to stand up and say that we will, for our own e-waste, follow the Basel Action Network? I think we probably are one of the first 10 companies in the world to sign up for that, so we’re pretty proud of that. We think it’s a great protocol, and we challenge other companies to come and do the same thing we did. It’s not hard to do. It basically requires you use good judgment and good practices as you’re disposing of your waste.
JOHN SHEGERIAN: That’s true, and we applaud you for doing that. Others are following, again, your leadership role by associating with and joining the Basel Action Network and signing onto their standards. For our listeners out there, we’ve got Kevin Anton, the Chief Sustainability Officer of Alcoa, on with us today. You can go and learn more about Alcoa’s great sustainability practices and everything they’re doing with regards to the environment and sustainability at www.alcoa.com. They have a top toolbar. Tap into the environment or sustainability sections. They’re actually really chockfull of great information. Kevin, there’s so much to cover. I want to talk a little bit about a recent development. You talked a little bit earlier about the green building world and how that’s really driving so much in the sustainability or green practices sector of the United States and beyond. Let’s talk about one of your most exciting recent announcements, Reynobond. I want our listeners to hear this story because this is just truly amazing.
KEVIN ANTON: John, we are so proud of this product. Reynobond is a product that we use. It’s an aluminum building product. It goes generally on facades of buildings. We’ve come up with a new product in that line called EcoClean. What EcoClean does, it’s literally smog eating. There’s a coating on the aluminum. It acts as a catalyst, and it coverts nitrous oxide to its basic elements and eliminates the smog. If you put EcoClean on 10,000 square feet of façade, and to help the listeners understand, 10,000 square feet would be about the amount of façade you’d have at a gas station, that’s the equivalent of planting 80 trees. It’s phenomenal. The product is just starting to hit the market in Europe now. There is lots of interest around the world in the product, so we’re very, very excited. We’ve got a product that we’ve been able to crack the code on for getting rid of some of the smog, which is great. It looks great. I talked before about the architects are on the forefront of green, but they also are about the pickiest customers because they put their name on a building, and they want the building to look great and last that way forever. So, we’re able to meet the quality requirements of the architect, help the environment, and we’re just very excited about this. The sky is the limit on this product.
JOHN SHEGERIAN: It’s a game changer.
KEVIN ANTON: Yes, absolutely.
JOHN SHEGERIAN: Isn’t this just another great example of the green innovation that Alcoa is committed to?
KEVIN ANTON: Yes. What we’ve actually been able to do is, again, talking back to that employee engagement I talked about earlier, our scientists, researchers, and developers are all now looking for how to apply innovation to the green space. Alcoa owns and operates the largest light metals laboratory in the world. It’s just outside of Pittsburgh, Pennsylvania, loaded with very qualified researchers, technicians, innovators, and as we used to say, Alcoa can’t wait for what comes out of there next.
JOHN SHEGERIAN: Kevin, earlier you talked a little bit about CAFE regulations and the great Alcoa wheels. Can we go back and talk a little bit about transportation and how you touch all the great OEMs, from Ford and Tata and GM and Audi and Nissan, you do so much great work with them. What does the aluminum relationship with regards to these OEMs mean for all of us and the actual world environment?
KEVIN ANTON: It’s exciting, and it’s spurred on by the regulation. We’ve seen aluminum growth in automobiles for as long as I’ve been in the industry. You get a 3 to 5% in aluminum content every year. I think we’re going to actually see that get accelerated as the new CAFE standards come in. The new fleet requirements are going to be 35.5 miles per gallon by 2016, so it’s a pretty significant increase versus where we are today, John. Just some throwaway facts here. First of all, road transportation creates 12% of the world’s greenhouse gases, so it’s significant.
JOHN SHEGERIAN: We’re going from muscle, now, to fuel efficiency, and that’s where the real rubber hits the road here, no pun intended.
KEVIN ANTON: Yeah, but quite frankly, the American consumer isn’t so keen on compromise, either. I think aluminum is going to help with that. An aluminum-intensive vehicle can reduce the weight of a car by 40%. Here’s the big one, John. For every 10% reduction in vehicle weight, there’s a 5 to 7% increase in fuel economy. You’ve got a great car, it performs, you don’t have to give up your performance, and you get the fuel economy.
JOHN SHEGERIAN: We’re talking about cars and transportation. Take it over to the commercial sector now, and what you do with Alcoa’s Calculighter and how that really also benefits the environment and the whole sustainability stakeholder loop also.
KEVIN ANTON: Yeah, we love this one. For every pound of aluminum we can put on a tractor-trailer combination, we can save 30 pounds of CO2, so it’s a fabulous equation there. What we’ve done is we’ve created an internet-based tool for our customers and their customers. The local fleet operator can go online to the Alcoa Calculighter and figure out if he equips his fleet with Alcoa wheels, what will his savings be in maintenance? He won’t have to paint steel wheels. What’s it in tire wear? What’s it in fuel economy? What’s his additional revenue that’s available to him because his trucks are 1,300 to 1,400 pounds lighter? He can now carry more weight safely on the road. He can go and calculate all those equations and get a payback. John, when I look at that with a customer, we kind of see that even though an aluminum can be two to three times the cost of a steel wheel, they look at a payback in under two years.
JOHN SHEGERIAN: And, that Calculighter, again for our listeners out there, Kevin, is located on your website?
KEVIN ANTON: Yes, it is.
JOHN SHEGERIAN: Got it. That is great. Now we’ve gone from regular transportation for us consumers out there to commercial transportation. Let’s go to, then, the next frontier, aerospace. Alcoa has a major engagement since the Kitty Hawk era with regards to aerospace. Can you share a little bit of what you’re doing with the aerospace industry, Kevin?
KEVIN ANTON: Sure. When people think of the Kitty Hawk and the Wright Brothers, you think we’ve all seen the balsa wood of airplanes and that they were fine. Where’s Alcoa on that? That’s not aluminum. But look at the engine block. What really facilitated that plane flying was a lightweight engine. That was an aluminum engine block that helped that plane fly. If you look at around the world, Alcoa innovation and Alcoa proprietary developed alloys are all over. We’re in just about every plane in the world. 90 to 95% of the aviation alloys were developed at that tech center in Pittsburgh, so we’re proud of it. We’re kind of there at the beginning of aviation. We continue to be there. We just had a very, very successful Paris Air Show a couple of weeks back. We introduced the third generation of our aluminum lithium alloys. These alloys will let people lower the weight of a plane by 10% versus the new composites, lower cost to manufacture, lower cost to maintain the airplanes, corrosive resistance. We’re very, very excited about the new alloys, as is the industry. Really, the proof is in the pudding when you’re an innovation leader. You can be an innovation leader, but you’re actually booking the orders and you’re delivering products to the customer in the marketplace that they want. I think Airbus gave us about as good of an endorsement as you can get. It’s signing their name along with the Alcoa name on a new contract that’s worth over $1 billion of aluminum sheet and plate that they’ll be buying from us. It’s on every airplane that Airbus manufactures. A great company, they recognize us as an innovation leader, and they want to be tied with us.
JOHN SHEGERIAN: That is just really great. Besides all these great industries that you touch, you have an amazing foundation at Alcoa. Can you share with our listeners about the Alcoa Foundation and all the impacts that Alcoa Foundation makes with regards to sustainability and the society at large?
KEVIN ANTON: Sure. In 1952, Alcoa created a foundation and endowed it with $16 million. Today, that endowment has grown to over $400 million. It makes Alcoa Foundation one of the largest endowed foundations in the country. When it was first established, the whole goal of the foundation was very much focused towards improving U.S. education. About 60% of the money expended over the first 20 years or so was geared towards U.S. education. As Alcoa has become a more global company and our agenda has expanded, so has the agenda of the foundation. The foundation is focused today on four basic themes. We want to promote environmental stewardship, we want to prepare the leaders for tomorrow, we want to enable social and economic sustainability. We haven’t gone far from our roots with the foundation, but it has a huge impact. The Keep America Beautiful operation that we did, Recycle Mania, that was funded by Alcoa Foundation. Alcoa Foundation is currently sponsoring a two-year research grant at the Colorado School of Mines. The goal of the grant is solid research based on economics, based on human behavior, to help understand what is missing and why are we not recycling things at the rate we should be recycling. Another one we’ve worked with is Pennsylvania Resources Council, and they’re working on a zero waste program. There’s fun things. We had people sponsored by the foundation, people out at the Steelers football games working on changing behavior, getting people to recycle. Phenomenal numbers of cans generated at a football game and the tailgaters. We had all those captured. One of the things we’ve noticed is people may recycle at home, but they don’t have a way to recycle when I’m having something away from home. Now we’ve put the infrastructure in place to do that. And we have fun with it. The example I gave here was the U.S., but the foundation makes an impact wherever Alcoa operates, whether it’s supporting the new national park in Iceland, supporting a microeconomic development in the Amazon. We haven’t lost our roots. We’re making sure education is right. As we went through the financial crisis last year, I was very proud to be associated with the foundation because they saw that there was a change in needs in the U.S. We could worry about recycling, we could worry about the rest of the agenda, but there was a real need to make sure people had food. So, the foundation changed part of its agenda, and worked with places like in Knoxville, Tennessee, we helped the Second Harvest group make sure that we’re getting food on the table for folks who can’t quite do it on their own. It’s pretty nimble, too.
JOHN SHEGERIAN: Again, I want to go back to some of the internal types of things that you do at Alcoa, stuff that’s not as visible or evident to everyone who knows about your great recycling of aluminum. What I want to tie it back to is some of your properties. For instance, you have a beautiful property, thanks to you that you brought it to my attention, Kevin, the Badin property in Badin, North Carolina. Can you share a little bit about your amazing history there, and bringing it to ERI’s attention, and how you have a history now at Alcoa of recycling your old facilities and creating new life and new uses and new births of new industries on some of your legacy properties?
KEVIN ANTON: Yeah. John, we’re real proud of this. Badin, North Carolina, is about an hour outside of Charlotte, and it’s an area where Alcoa actually began operation in 1915. In 2010, we came to the conclusion that it could no longer profitably be an aluminum plant, so it was time to move on. Alcoa is a big part of the town. In our peak times, we would have had 900 to 1,000 employees working there. This is a town of 2,000 people, so you have a bit of an obligation when you start to exit a community like that. We had a great opportunity working with the ERI to say how do we start to repurpose this industrial site? This site literally is downtown. It’s the whole town. We’re bringing in ERI, we’re putting some money into converting one of the aluminum processing buildings into an e-waste recycling facility, and that will be done by the first of the year. So, we’re very excited about that. It’s going to be a state-of-the-art recycling facility, and we’re in constant conversation with other industries about coming to the site. My ultimate vision, John, is that we will have a diverse group of employers operating on the old smelter site. The old smelter site will be fully remediated in a safe facility, and we’ll have four to six different companies working there with the same employment that we had in the past, and the community will have a nice, diverse employment base instead of focusing just on one company.
JOHN SHEGERIAN: You’re very humble about all these kind of things, Kevin, but you’re not a rookie at this. If I’m not mistaken, Alcoa won this year a Phoenix Award with regards to recycling one of their old facilities and creating a new life there. Can you share a little bit with our listeners that experience?
KEVIN ANTON: Sure, John. I’m just actually looking at the trophy sitting on my desk. I don’t want to let it go because it’s so good-looking. The award we won this year was the Phoenix Award, and that is given out in conjunction with the EPA for the best brownfield redevelopment of a site. It wasn’t won just by Alcoa; it was won by the Port Authority in the City of Troutdale, Oregon, where we did this site, and it was also by FedEx, who’s now on the site. What we’ve done is we converted what was a World War II vintage smelter, literally built to support the World War II war effort by the U.S. government and Alcoa, and operated up until about 10 years ago, and then it shuttered. We cleaned it up, and we’ve given it a new purpose. Now it’s a great FedEx distribution center, over 1,000 employees there. It was a win for FedEx, it was a win for Alcoa, it was a win for the community, and we were so proud when the Troutdale Alcoa FedEx name was called at the EPA dinner about two months ago in Philadelphia. It’s just a great celebration.
JOHN SHEGERIAN: That is just great news. Kevin, we’re down to the last two minutes or so, and I want to leave this for you to share any final thoughts you have. You’ve been at Alcoa for almost 13 or 14 years now, and you now have been the CSO for a year. Talk a little bit about where you want to go and what your vision is, and share with our listeners any pearls of wisdom that you want to share as we sign off here.
KEVIN ANTON: I appreciate that, John. As I think back now, having been in the role for a year, what does success look like? I keep coming back, and I’m sorry about this, to a fully engaged workforce. The true leverage of my position is to get the 60,000 Alcoa employees understanding how to connect sustainability and doing the right thing to the business case and the bottom line. So, what does that look like inside of Alcoa? That’s starting with innovation. Let’s make sure that we’ve got our technicians and our Ph.D.s and researchers at the tech center bringing new products to market. It’s making sure that the people operating our facilities operate them with the smallest possible footprint, making sure that we’re engaged in the community and we’re viewed as an active, positive contributor in the community. When we start in the community and then when we leave the community, we leave it better than what we started with. That we take good care and make sure that our employees are safe every day, and again, John, getting the whole workforce aligned around bringing products that help solve the next generation’s problems, and then leading by example. We do a lot of benchmarking with great sustainability companies. We’re scheduling a trip now to learn from Dow what they do. Lots of companies want to benchmark Alcoa because we do OK in this space ourselves too, so it’s that leadership role. It’s stepping up and joining the Basel Action Network, and then challenging our business partners to do the same thing, working on energy efficiency, and challenging our business partners to do the same, and learning from our business partners. It’s an exciting time, John.
JOHN SHEGERIAN: It is an exciting time. Kevin, it’s an ever-changing world and sustainability, as you’ve taught me, is a process, so of course we’re going to welcome you back here to Green is Good to continue to share the Alcoa story as things evolve and your office evolves over at Alcoa. Again, for those of you who have been listening, please go to Alcoa’s website, www.alcoa.com, and click on their toolbar the environment section or the sustainability section. It’s truly very informational, tons of great info there. As Kevin shared earlier in the show, there’s a lot of great tools that everybody out there can also use with regards to engagement, from the Aluminate app to the Calculighter and things of that such. Please avail yourselves of them. Kevin, because of you, Alcoa is truly making a bigger impact on the world. You are an inspirational sustainability visionary, and truly living proof that green is good.
KEVIN ANTON: Thank you for that, John. Make sure you recycle that can.