International aluminum cartel

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International aluminum cartel of 1901, founding meeting

The international aluminum cartel was an amalgamation of mainly European aluminum producers or their national cartel groups. The American ALCOA was temporarily affiliated. The cartel existed intermittently and under considerable changes between 1901 and 1978.

history

The manufacture of aluminum has been an international industry from the start. In the first phase of industrialization, manufacturers in Europe, outside France, were forced to acquire a license for the patents of co-owner Paul Héroult from Aluminum Industrie AG (AIAG) in Neuhausen . The French producers organized themselves in the Cie. de Produits Chimiques et Electrometallurgiques d'Alais Froges et de la Camargue (AFC) , who used the older Deville process until they switched to the Hall patents of the Pittsburgh Reduction Co. in the 1890s, which entered into an agreement with the AIAG in 1896 that was decisive for the first aluminum cartel. After a phase of bilateral agreements, which was characterized by know-how control and licensing among the manufacturers, international cartelization began in 1901 with the establishment of the Aluminum Association . Set up as a syndicate cartel with a joint sales point , the association broke up in 1908 due to outsider competition and quota rivalries. Aluminum Co of America (Alcoa), the successor to Pittsburgh Reduction Co, which had not yet joined the cartel, organized the 100% takeover of Northern Aluminum Co , which was one of the signatories, two days before the signing . The agreement guaranteed the numerous members of their domestic markets, which they referred to as "closed". The US market was closed to European manufacturers, while the rest of the world (including Germany) became "open", where sales could only be made at the prices agreed in the cartel. After the dissolution of this cartel, AIAG and Northern reassured each other of their specific domestic markets and shared the others at fixed prices. Due to the limited domestic market, AIAG dominated European exports at that time, although its metal production was lower than that of the French group.

The second international cartel was re-established in 1912 in a less centralized manner, but with the additional obligation to forbid members from dealing with non-members. This agreement was suspended on January 23, 1915. During the First World War, a war cartel for aluminum was formed among the cartel members of the Western powers . This lacked any connection with the previous cartel partners on the other side, as is known from other cartels (such as the technology partnership between Standard Oil and IG Farben ). During the period of the investigation, the American side ALCOA was mostly a difficult partner in a national monopoly position.

After the end of the First World War, the cartel was not immediately revived. In the meantime, a new development had changed the competitive situation: Germany had become a major producer after the establishment of the United Aluminum Works , in which the state held half. First, a gentlemen's agreement was agreed between the European producers in 1923 and renewed in 1926 and 1928. It included: (1) control of the members' sales on the basis of quota regulations, (2) application of these quotas for domestic sales and exports, (3) application of quotas for both bars and alloys, (4) quarterly verification requirements, ( 5) Fixing a standard price.

In October 1931 the Allianz Aluminum Compagnie (AAC), Basel, was founded with a share capital of CHF 35 million, which was divided into 1,400 class A shares with 100 m³ production capacity per anno as well as 1,200 shares for top-ups or for new members :

The alliance was led by a board of directors and a board of directors. The former was responsible for decisions and statutes for submission to the general meeting, capital changes, financial policy and matters of importance to the company as well as the implementation of resolutions of the board of directors. The majority of the board of directors consisted of Swiss citizens, in accordance with company law requirements. The United States, the USSR and Japan remained outside the cartel.

Compliance with the quotas was monitored by auditors from PwC , who had access to all production sites. The cartel set minimum prices and bought stocks above 40 t per Allianz share. It made a distinction between domestic and foreign markets, treating the US market as domestic. The Giulini brothers , Martigny , who had not signed the second cartel, were joined by a contract of their own in 1934, the obligations of which were taken over by the German group (VAW and Aluminumwerke AG). Germany could increase its production on condition that it did not export it. Giulini's aluminum smelter in Mundenheim was closed in 1936. In 1936, a new cartel agreement imposed punitive tariffs in the event of overproduction, which, however, became invalid two years later due to the general increases in the armaments industry. After the defeat of France, the German group held 574 shares, the British and Canadian groups 610 shares. In 1941 the board of directors rejected the German group's request to transfer all financial assets deposited abroad to Switzerland. According to the balance sheet last published on October 31, 1942, CHF 7,401,631 were invested in gold in Switzerland at that time, CHF 4,941,474 in Canada, along with 1.3 million US dollars in cash. The liabilities for the 1400 shares were valued at CHF 25,000 each.

After the Second World War, the international aluminum cartel continued to exist in bulk. The entrepreneurial leeway was restricted by national intervention. The cartel relationship ended in 1978 after it was disrupted by market changes and criminalization by the European Commission . In the end, the London Metal Exchange took over the design of the aluminum market, for which futures were now sold. Cartel historian Marco Bertilorenzi doubts that this neoliberalization was beneficial for the world economy: price stability was reduced and a development towards “huge transnational conglomerates” was initiated. The antitrust lawsuit (by the aluminum producers) from 2013 that the metal exchange LME and Goldman Sachs had manipulated prices of aluminum “in an anti-competitive and monopoly manner” seems like a confirmation .

literature

  • Marco Bertilorenzi, The international aluminum cartel, 1886–1978. The business and politics of a cooperative industrial institution, New York [u. a.] 2016.
  • Louis Marlio : The Aluminum Cartel , Brookings Institution Washington 1947.
  • General report on the economic side of the international industrial cartels . Prepared for the Economic Committee of the League of Nations , Berlin 1932 (together with: Antonio S. Benni / Clemens Lammers / Louis Marlio / Aloys Meyer).

Individual evidence

  1. ↑ Marco Bertilorenzi, The international aluminum cartel, from 1886 to 1978. The business and politics of a cooperative industrial institution, New York [u. a.] 2016, p. 23.
  2. ↑ Marco Bertilorenzi, The international aluminum cartel, from 1886 to 1978. The business and politics of a cooperative industrial institution, New York [u. a.] 2016, p. 49.
  3. ↑ Marco Bertilorenzi, The international aluminum cartel, from 1886 to 1978. The business and politics of a cooperative industrial institution, New York [u. a.] 2016, pp. 50, 68-70.
  4. ↑ Marco Bertilorenzi, The international aluminum cartel, from 1886 to 1978. The business and politics of a cooperative industrial institution, New York [u. a.] 2016, pp. 90, 129.
  5. ↑ Marco Bertilorenzi, The international aluminum cartel, 1886-1978. The business and politics of a cooperative industrial institution, New York [u. a.] 2016, pp. 103–121.
  6. ↑ United States Foreign Economic Administration: The Light Metals Industry in Germany. (PDF Retrieved from the Library of Congress) US Govt. Print. Off. Washington, 1945, Retrieved May 9, 2020 .
  7. ↑ Marco Bertilorenzi, The international aluminum cartel, from 1886 to 1978. The business and politics of a cooperative industrial institution, New York [u. a.] 2016, p. 255 ff.
  8. ↑ Marco Bertilorenzi, The international aluminum cartel, 1886-1978. The business and politics of a cooperative industrial institution, New York [u. a.] 2016, pp. 103–121.
  9. ↑ Marco Bertilorenzi, The international aluminum cartel, from 1886 to 1978. The business and politics of a cooperative industrial institution, New York [u. a.] 2016, p. 328 ff, 360.
  10. ↑ ak / ap / dpa-afx: Aluminum manufacturers are suing Goldman Sachs. Manager magazin, August 5, 2013, accessed on May 6, 2020 .