Bartiromo: Can you characterize the quarter for us
Kleinfeld: As you see, I mean, it's been a quarter where a lot of things have happened. And all the programs that we have, have worked out. Let me say three things.
We see, number one, on the outside we have record low inventories in the supply chain, the stimulus program is working. You see revenues for us have been going up by 9 percent. This is pretty much all across the board in all the industries that we're touching, other than aerospace and industrial gas turbine.
We believe that the aluminum market second half of the year is going to grow by 11 percent compared to the first half.
That's one thing, the second thing is, we turned the crisis into a real opportunity. We strengthened our cost structure, strengthened the balance sheet, refocused the portfolio. 90 percent portfolio is in the number 1 or number 2 position.
At the beginning of the crisis, we set really ambitious cash targets. We are exceeding, or reaching them. Procurement $1.6 billion of cash we're getting today. Overhead $400 million. Working capital $800 million. But all of that is much needed because we also have been facing pretty strong headwinds, coming from currency big-time and slowly creeping in from energy.
The third point, we have not compromised the present for the future. This quarter is also a quarter where we have been completing substantial growth projects. In Brazil, in China, in Russia, that has an outstanding opportunity to continue also to bring Alcoa further.
Bartiromo: Klaus, can you give us a sense of where the demand is coming from right now? Is it largely China, is it largely Brazil, or I guess the real question that everybody wants to know is, when are we actually going to see a turn in the United States? Where's the demand coming from? Look around the world, tell me the most important markets for you right now.
Kleinfeld: Look, I want to leave the forecast on the end markets to the economists. What we are seeing is this growth from second quarter to third quarter of 9 percent revenue growth.
That pretty much comes when you look at the end markets, comes from all across end markets, from automotive, from trucks and trailers, from building and construction as well as from packaging.
The only two industries that we're touching where it doesn't come from is aerospace and industrial gas service.
The second thing, when you look at it from a regional perspective, China clearly is back very, and back very strong and pulling some off the Asian markets with them. Asia and Middle East, I would say with them.
In the U.S., we clearly see stabilization in the U.S. and when we look at the aluminum industry, that we're going to see an increase of aluminum demand between the first half and the second half. That's driven by a number of factors.
Always keep in mind the de-stocking has gone to levels, which we have not seen before. They're at record low levels. And once that has — it hasn't set in yet. Once that is starting to set in, we're going to see a pretty substantial increases coming through.
Bartiromo: Klaus, what would you say about the fourth quarter? Any thoughts in terms of forecast, what the rest of the world looks like in the next three months?
Kleinfeld: Well, that's always a very difficult one. At this point in time, my impression is that we're going to see, on the China side, all indications of showing that this recovery is a strong and stable recovery.