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PPMA Leeds 2014Cindy Penney – Alcoa Power & Propulsion

9th May, 2014

Advancing each generation

Invented Aluminum Aluminum

Applications & Globalization Multi-Material

Solutions

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Wing ribs (plate and extrusions)

Wing tips

Hydraulicvessels

Fuel connectors

Torque rods

Seat frames

Window and door frames

Wheels, brakes and torque tubes

Fuselage to wing connection

Wing box fasteners

Engine pylon structure and fasteners

Wing spars (forgings and plate)

Wing stringers

Wing gear ribs, trunions and support fittings

Upper wing skins

Crown frames

Auxiliary power unit exhaust ducts

Vertical stabilizer fasteners

Fuselage stringers

Fuselage skins

Seat tracks

Landing gear, bay frames

Lower wing skins

Wing flap fasteners

Fan blades

Guide vanes Hot section blades and vanes

Compressor cases

Fuel metering unit

Fan hub and compressor frames

Bearing housings

Alcoa content on Metallic aircraftCurrent

Future

• More than 90% of all aluminum aerospace alloys have been developed by Alcoa

• Every Western Commercial aircraft flying today uses Alcoa fasteners

• Every Western Commercial and military aircraft engine uses Alcoa castings

Alcoa Blue flies from nose to tail on metallic-intensive aircraft

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World leading investment casting plant

600+ employees

$132M in revenue

Sole company location with on-site Ceramic Core, Alloy and Casting Foundry plants

Main products are gas turbines and aerospace airfoils

APP Exeter recently completed a full scale turnaround

APP Exeter Overview

Exeter is APP’s key operation in UK

Source: Alcoa Exeter 2014 Impact Awards Application

Team is proud of its 2-year turnaround

DART rate 85%

Revenue 47%

EBITDA 14 points

DWC 20%

GVS Scores 235%Note: total percentage increase / decrease over 2 years from 2010 to 2012

EBITDA in 2010 was negative.

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In 2010, both employees and community were disengaged with Alcoa

Situation and Response

What we set out to accomplishWhat we set out to accomplish

Increase engagement score to 65% by 2013

Improve employee morale by

− Instilling workforce pride through leadership development

− Focusing on employee wellbeing

Build community engagement through STEM related activities

− Developing a cutting edge program

− Winning recognition for our efforts

Situation

2010

33%23%

32%

20092008

Low morale and negative press resulting from 47% work force reduction

Declining interest in volunteering among employee base

Loss of connection with local community

Source: Alcoa Exeter 2014 Impact Awards Application

Disturbing engagement score trend

GVS scores

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Initiatives launched to build employee pride, improve wellbeing and engage the community

Project Initiatives

Employee Pride CommunityWellbeing

Build a culture of mutual respect

Advance supervisory excellence

Enhance employability of workforce

Grow people’s resilience & ability to deal with change

Launch “Alcoans in Motion”

Partner with health organizations and charities

Rebuild contacts with community stakeholders

Develop programs with local institutions

Provide STEM apprenticeships for local youth

Source: Alcoa Exeter 2014 Impact Awards Application

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Individual Focus

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Feeling Valued

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Building Pride

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Communication Strategy

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Persistence, partnerships and focused approach were key to overcoming obstacles to success

Source: Alcoa Exeter 2014 Impact Awards Application

Obstacles, Approach and Success Factors

Obstacles

Community Indifference

Reputational Risks

Limited Funding

Employee Skepticism

Approach

Maintained consistency in programs

Increased level of exposure

Utilized the community framework survey to jointly identify key themes

Built relationships through employee ambassadors

Focused on STEM related needs of the community

Partnered with charity organizations

Leveraged Alcoa and govt. grants

Success Factors

PersistenceFocus

üü

PersistencePartnershipFocus

üüü

PersistenceFocus

üü

Partnershipü

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Project exceeded all of our expectations

Project Results

Increasing engagement scoresIncreasing engagement scores Improved performanceImproved performance

Productivity: up 10% YoY

Over last 2 years:- DART rate: down 85% to 0.16 from 1.06- Employee turnover rates: 5.6% 2%- Absenteeism: down 2%

77

23

20132010

Target: 65

3.35X

Source: Alcoa Exeter 2014 Impact Awards Application

Awards and recognitionAwards and recognition

Alcoa 2014 Impact Award Finalist

CIPD People Management Award 2013 – Overall Winner

Exeter College Engineering Employer of the Year 2012

Employers Engineering Federation 2012 SW Award for Skills

“Health Champion” by the Royal Society for Public Health in 2012

Mindful Employer’ Charter 2012 by the National Health Service Trust

GVS scores

Exceeded best-in-class scores for Wellbeing, Community and Volunteering

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Game Changing HR

Lessons Learned

Build leadership

skills

Build leadership

skills

Focus on clear

objectives

Focus on clear

objectives

Utilise formal programmes, lunch and learn sessions to share best practice and coaching

Develop local

workforce

Develop local

workforce

Source: Alcoa Exeter 2014 Impact Awards Application

Leverage partnershipsLeverage

partnerships

Understand and pursue available grants

Engage them as a thought partner

Identify and invest in talent with potential

Encourage coaching of trainees/ engineers

Unify efforts under common themes, e.g., all community efforts were STEM related