The Recasting Of Alcoa

Paul H. O'Neill has never been coy about flouting cherished traditions. Four years ago, O'Neill left his post as International Paper Co.'s president to join Aluminum Co. of America as chairman, becoming the first outsider in the company's 103-year history to call the shots. Although O'Neill knew precious little about the aluminum game, he quickly refocused Alcoa on its notoriously cyclical aluminum businesses, while reassuring investors that there would be no more wild earnings gyrations on his watch. Critics figured that O'Neill was in for a few unpleasant surprises. But Alcoa's return on equity has averaged 15% since he arrived on the scene, 50% above the average of the previous decade.

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