Alcoa 2013 Annual Report Download - page 51

Union disputes and other employee relations issues could adversely affect Alcoa’s financial results.
A significant portion of Alcoa’s employees are represented by labor unions in a number of countries under various
collective bargaining agreements with varying durations and expiration dates. For more information, see “Employees”
in Part I, Item 1. (Business) of this report. The master collective bargaining agreement between Alcoa and the United
Steelworkers, which covers 10 locations and approximately 6,100 U.S. employees, expires on May 15, 2014. If a new
long-term agreement is not reached, work stoppage at some of the 10 locations could begin on May 16, 2014. While
Alcoa was previously successful in renegotiating the agreement with the United Steelworkers in June 2010, Alcoa may
not be able to satisfactorily renegotiate this or other collective bargaining agreements in the U.S. and other countries
when they expire. In addition, existing collective bargaining agreements may not prevent a strike or work stoppage at
Alcoa’s facilities in the future. Alcoa may also be subject to general country strikes or work stoppages unrelated to its
business or collective bargaining agreements. Any such work stoppages (or potential work stoppages) could have a
material adverse effect on Alcoa’s financial results.
Alcoa’s human resource talent pool may not be adequate to support the Company’s growth.
Alcoa’s existing operations and development projects require highly skilled executives, and staff with relevant industry
and technical experience. The inability of the Company or the industry to attract and retain such people may adversely
impact Alcoa’s ability to adequately meet project demands and fill roles in existing operations. Skills shortages in
engineering, technical service, construction and maintenance contractors and other labor market inadequacies may also
impact activities. These shortages may adversely impact the cost and schedule of development projects and the cost
and efficiency of existing operations.
Alcoa may not realize expected long-term benefits from its productivity and cost-reduction initiatives.
Alcoa has undertaken, and may continue to undertake, productivity and cost-reduction initiatives to improve
performance and conserve cash, including new procurement strategies for raw materials, such as backward integration
and non-traditional sourcing from numerous geographies, deployment of company-wide business process models, such
as Alcoa’s degrees of implementation process in which productivity ideas are executed in a series of steps, and
overhead cost reductions. There is no assurance that these initiatives will be successful or beneficial to Alcoa or that
estimated cost savings from such activities will be realized.
Alcoa may not be able to successfully develop and implement technology initiatives.
Alcoa is working on new developments for a number of strategic projects in all business segments, including advanced
smelting process technologies such as inert anode and carbothermic technology, alloy development, engineered
finishes and product design and manufacturing. For more information on Alcoa’s research and development programs,
see “Research and Development” in Part I, Item 1. (Business) of this report. There can be no assurance that such
developments or technologies will be commercially feasible or beneficial to Alcoa.
Unexpected events may increase Alcoa’s cost of doing business or disrupt Alcoa’s operations.
Unexpected events, including fires or explosions at facilities, natural disasters, war or terrorist activities, unplanned
outages, supply disruptions, or failure of equipment or processes to meet specifications may increase the cost of doing
business or otherwise impact Alcoa’s financial performance. Further, existing insurance arrangements may not provide
protection for all of the costs that may arise from such events.
Item 1B. Unresolved Staff Comments.
None.
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