The Light Metal Age Played a Critical Role in the Survival of Aluminium
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Aluminium International Today 1989-2019 Aluminium International Today 1989-2019 government has long played a role in the de- practices in the sector but one which also gen- By way of contrast, when the struggling Brit- velopment of the aluminium industry for good erated innovation through the collective sharing ish Aluminium Company Ltd (BACo), the UK’s and sometimes for ill. From the outset the state of research and development. Military demand dominant aluminium producer, was eyed for The Light Metal Age played a critical role in the survival of aluminium. for the metal reached its peak during World War takeover by Reynolds Metals and UK fabrication In the 1850s, French emperor Louis Napoleon III II, especially given the importance of air power, fi rm Tube Investments in the winter of 1958-9, Aluminiumville both acted as a fi nancial backer of, and an advo- driving a massive expansion in the productive the UK government chose not to intervene, By Andrew Perchard* cover cate for, the French industry. Above all, it was the capacity of the industry and protection over despite the Cabinet being split over the matter. military applications for the metal starting with strategic reserves, which would inform policy A further disastrous fl irtation with the government Transformation in the global aluminium industry aluminium production (Stuckey, 1983; Lesclous, Franco-Prussian (1870-1) and second Anglo-Boer on stockpiling in the Cold War amongst the sponsored attempts to build the new generation since Aluminium International Today launched 1999). For most of that century then, the industry (1899-1902) wars that opened up opportunities key powers (Grinberg and Hachez-Leroy, 1997; nuclear power stations, Advanced Gas-cooled 30 years ago has been dramatic by any stand- was characterised by rapid backward vertical for an industry struggling for markets. Expan- Frøland and Ingulstad, 2012; Perchard, 2012). Reactors, and reduce imports of aluminium ingot, ards. That same year saw the start of a series of integration, oligopolies and powerful cartels, as sion in the demand for aluminium was aided almost saw go to the wall and ultimately led to revolutions across Eastern European and Baltic well as by a pronounced incidence of state in- by the birth of the modern industry in 1886 with In the United States, longstanding concerns their merger with Alcan’s UK subsidiary in 1982. satellite states of the Soviet Union culminating volvement. In respect of concentration and state the Hall-Héroult process replacing far more over monopolies saw Alcoa – also the parent In BACo’s case, whilst proximity to government in 1991 with the fall of the Berlin Wall. This was intervention, especially of the primary industry, expensive and smaller scale processes (those of the Aluminium Company of Canada (Alcan) and the narrow selection of directors from the preceded by political and economic reforms that remains true to a signifi cant degree even if leaders and educators, as it has been of politics, discovered by Henri Sainte-Claire Deville in 1854 – become the target of successive antitrust ranks of the military and civil service served the that had signifi cant implications for the Soviet the geographical locus has shifted. intent on rea! rming comforting myths and rhet- and by Alfred Cowles in 1887). However, it was actions and enquiries by the US Department company well initially, it led to disastrous conse- domestic, and ultimately the global, aluminium oric. The history of aluminium is peppered with especially the watershed of World War I, and of Justice (1911-1912, 1924-1930, and 1937-1945), quences with the board increasingly unable to industry; with the collapse of military orders, At the dawn of the 20th century, aluminium failures as well as successes. There are lessons the expansion of aluminium’s use from soldiers’ the Federal Trade Commission (1920s), and the distinguish between the priorities of the business including strategic stockpiling (which accounted enthusiasts proselytised about the coming of a to be learnt both from events, as well as industry canteen and explosive powders to aeroengines Temporary National Eco- and those of government (Per- for around 80 per cent of Soviet output), the “Light Metal Age” (Perchard, 2012). As Alumini- and organisational behaviours. and military vehicles, that led to a revolution in nomic Committee (1930s) chard, 2012; MacKenzie, 2012). increasingly liberalised industry looked further um International Today enters its third decade, aluminium. It also marked a watershed in the under both Democrat and While in France, major national afi eld with large quantities of primary metal be- the “lightest and brightest of metals” remains This chapter focuses on a number of recurrent evolving relationship with the state. In most of Republican administrations. producer Pechiney-Ugine-Ku- ing dumped on global markets. In 1990, the So- ubiquitous. Beyond its material presence, some themes in the history of the industry; those of the the major combatant nations, leading company In 1945, Alcoa was found hlmann, close to bankruptcy, viet Union exported 250,000mts of aluminium. economists have postulated on aluminium as a industry’s relationship with government, the man- o! cials served in government ministries, the guilty of monopolization. was nationalised between 1981 By 1994, three years after the USSR’s collapse, reliable barometer of global economic growth. In agement of political risk, and cartelisation and state regulated sales and prices for the metal. Prior to this, and under the and 1995 (Barjot, 2016). It was Russian exports had reached 2.293 million mts the Metals Forum’s (2015) Strategic Vision 2030, accusations of anti-competitive practices. For In Britain and France, national producers served auspices of national defence taken over by Alcan in 2002. (with signifi cant amounts being purchased by the while emphasising recognising the metals indus- despite profound changes in the global structure in government and were subject to controls. requirements (but informed The same year, VAW was taken London Metals Exchange, which had launched try as forming the backbone of UK construction, of the industry, these remain salient issues for However, they also used their position of infl u- by antitrust sentiments), over by Norsk Hydro. aluminium in 1978 (Godzmirski, 2018). manufacturing and infrastructure, Metals Strategy industry, evident in contemporaneous discus- ence to undermine their German-owned Swiss key fi gures in the wartime Steering Group Chair, Jon Bolton, underlined sions of the role of state owned or controlled competitor (AIAG subsequently Alusuisse) and administration of President Australian wartime poster for scrap aluminium, Thus, the aluminium industry c.1939-1945 Many of the global leaders in 1989 either do the importance of history both to understanding enterprises in the global industry, trade tari" s secure some political support and protection for Franklin Delano Roosevelt (as with most non-ferrous and not exist or have been absorbed into larger strategic decision-making in the industry and and controversies over LME warehousing (WTO, the industry. In Germany, where there was no supported a number of new ferrous metals producers) then, metals conglomerates. The scale of production investment and changes in the policy environ- 2010; World Bank, 2011; Chatham House, 2014; national producer of aluminium and it was even entrants, the largest being, the Reynolds Met- as now, has long had to navigate a cautious has grown exponentially, and the epicentres of ment. It is commonplace to repeat the Spanish European Aluminium, 2018). Political interven- less endowed with access to key raw materials, als Company and Kaiser Aluminium, to secure path in its complex relationship with the politi- bauxite, alumina and primary aluminium pro- philosopher George Santayana’s maxim that tion in the industry has typically been justifi ed a national aluminium producer was established government fi nance and contracts, take control cal environment. The astute conduct of public duction have shifted geographically, as have those who do not read history are forced to primarily on two grounds: national defence and (Vereinigte Aluminium-Werke AG (VAW) to cir- of Alcoa’s upstream and downstream plants a" airs – and appreciation of the potential pitfalls markets for the metal. Meanwhile a combination repeat it. Over a century before the French reconstruction; and competitiveness. In addition, cumvent the blockade to Germany, which would and patents. So that by the end of WWII, Alcoa’s of historical precedent in this as in the impact of of market mechanisms and new entrants to the enlightenment philosopher and historian Voltaire aluminium’s energy requirements, supply chains, go on to become a major global player. Ger- dominance of US markets was broken. These other external forces – remains an imperative as industry (many of them state owned or subject to remarked that: “History never repeats itself. Man land ownership, and more latterly environmental many’s lack of access to the vital raw materials interventions also propelled both Reynolds tensions between the China, Europe and the US state control) have profoundly altered the global always does.” Whilst a grasp of history is vital, as impact have also piqued the interest of legisla- necessary to produce aluminium, as well as an and Kaiser to emerge as major global players continue to demonstrate. market. Contrast this with the global industry’s with any knowledge, it is how we choose to read tors. A further related issue considered is that of e" ective military blockade, became the mother by the 1950s (Smith, 1988; Perchard, 2019). To structure throughout much of the 20th century and evaluate the past. As is abundantly clear sustainability – that of the fi rm and the industry’s of invention and innovation. a signifi cant degree, Richard Reynolds Senior COLLECTIVE RESPONSES: and we see how profound that change was. In from the world around us, there are many who ecological footprint – both of which, alongside (Reynolds Metals’ founder) and Henry J.