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Can New Alcoa Add Up? Investors Have Doubts

For most of its 127 years, Alcoa Inc. has done two things: it’s made aluminum, and it’s made stuff out of aluminum.

Now Klaus Kleinfeld wants to change that with a bold -- and potentially risky -- plan to cleave the aluminum giant in two.

A symbol of American industrial might through the 20th Century, Alcoa said Monday that it would separate its shrinking, legacy aluminum business from its growing downstream operations, which focus on making products for industries including autos and aerospace.

Whether dividing Alcoa into separate companies will pay off is far from certain. Kleinfeld, the chief executive, wants to decouple the highly-engineered lines from legacy operations that have been hurt by the collapse in world commodities prices.

That risks alienating investors who sought diversification: the...


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