Klaus is playing this company for all he can milk out of it. He is there to collect his big salary.
The so called "downstream engineered products" division , which he built by over paying for low profit margin aerospace companies, has little revenue or profit growth potential.
Alcoa's core business lines, the upstream business lines,if and when aluminum prices strengthen has higher revenue and profit growth potential.
For the above reasons the planned division of the company makes no sense. All this will do is add costs and reduce business synergies.
The best thing that could happen for AA stock right now is the resignation or termination of Klaus Kleinfeld. Without that, and if the plans to split the company materialize, AA stock will quite possibly soon lose 50% or more of it's market price.
Actually, by overpaying to acquire companies, KK has weakened AA's balance sheet and put the company at financial risk.
His most significant mistake, however, was the forthcoming plan to divide the company. This will increase costs , reduce economies of scale, and diminish current the company's current business synergy's.
All factors considered AA stock here at this relatively high $9 stock price, is a very risky investment.
KK's agenda, since he arrived,, has been to do what he can to keep his salary. Specifically, he favors initiating multi year plans. This way, Alcoa may continue to record dismal business operating results, and KK then sells his stories of various multi year plans. For example, a few years ago it was the "acquisition of value added business lines" that was his favorite story. More recently , "dividing the company" became his mantra. And today, his newest story, to buy him more time , the story is "job cuts".
Wall Street pros are not fooled by KK's nonsense, which is why AA stock has declined ever since KK arrived.
Considering the company's debt level, little to no sales revenue growth, and low profit margins, I believe $2 to $3 per share is a real possibility. In the coming quarters I expect AA will record some significant operational financial losses.