This week, aluminum company Arconic's (NYSE:HWM) CEO, Klaus Kleinfeld, was surprisingly ousted from his position by investment manager Elliott Management, which claimed Kleinfeld had mailed them an intimidating or threatening letter.

In this clip from Industry Focus: Energy, Motley Fool analysts Sean O'Reilly and Taylor Muckerman explain what's happening with the corporate seat change, the context behind it and why it matters, and what this might mean for Arconic going forward.

A full transcript follows the video.

This video was recorded on April 20, 2017.

Sean O'Reilly: We have to briefly talk about what's going on with Arconic. Basically, this week, the sudden ouster of its CEO Klaus Kleinfeld. Arconic is the lightweight metals and engineering manufacturer. It's the successor --

Taylor Muckerman: Well, not successor, because Alcoa (NYSE:AA) still exists. 

O'Reilly: It spun off the original aluminum production operations, and this is the advanced stuff. So Alcoa took the name.

Muckerman: Alcoa kept the aluminum production, and they spun off the aluminum products division into Arconic.

O'Reilly: Yeah. It was interesting to me, because in every press release I've ever seen for this, or analysis, Arconic is not mentioned as a spinoff. It's just, "We're separating, and that's it."

Muckerman: Yeah, I guess maybe not a spinoff, technically. 

O'Reilly: But bottom line, that's just semantics to this point. This happened about six months ago. The guy that steered Arconic through this process of becoming an individual company was, again, CEO Klaus Kleinfeld. Total surprise -- it was announced on April 17 that Kleinfeld has been forced out by investment manager Elliott Management. This is actually where it gets even weirder.

Arconic said that Mr. Kleinfeld's exit came after he sent an unauthorized letter to Elliott Management, that Arconic's board of directors said showed poor judgement. The company then said that Mr. Kleinfeld is stepping down by mutual agreement. I don't know what was in this letter. That sounds awesome. If somebody knows, tweet at me, I guess. Elliott said in a statement that the letter from Mr. Kleinfeld "read as a threat to intimidate or extort a senior officer of Elliott Management based on completely false insinuations, a threat that we took seriously and about which we immediately and privately informed the board." Whoa.

Muckerman: Yeah, I would believe them if they didn't already want him out of there for over a year. This is just their excuse.

O'Reilly: That's the final cap on this whole --

Muckerman: They were probably poking the bear for a year, and he finally woke up from hibernation.

O'Reilly: Arconic is going to have a shareholder meeting on May 16, and they had it on the docket to get him out. That letter, I want to know what's in that letter. That sounds insane, from a professional CEO of a large corporation.

Muckerman: Yeah. If you're a shareholder of Alcoa -- because he's been the CEO of Alcoa before the split -- he pushed back against the split in 2012 and 2013, when the price of commodities started to fall, eventually succumbing to investors' demands, and successfully overseeing the split and then taking control as the CEO of Arconic. He's a visionary. He has long-term visions for Arconic, not these near-term visions that Elliott Management has. If you look at his success at Alcoa and Arconic now as a businessman and a relationship man with their customers, Boeing was going to go all composites, they were going to completely eliminate the aluminum products that they used from Alcoa and now Arconic. He had the CEO come to their plant, they hashed it out, and they proved that they needed to remain an Arconic customer. And it's one of their biggest contracts. And then you see the CEOs of Airbus, on top of Boeing, United Technologies, and to [General Electric] Aviation all voicing their support for Klaus Kleinfeld. But Elliott Management, they have some ulterior motives, some short-term motives, I'm sure.

O'Reilly: This is not news, yeah.

Muckerman: The stock did pop a little bit, but all these reports you see about his track record in the market for Alcoa, all say, "Oh, this stock's done so poorly since he's been there!" But they never mention the fact that the price of aluminum has also done quite poorly since he was CEO.

O'Reilly: Right. Lemons out of lemonade. Last thing before we move on, what you were talking about, he's a visionary. When the split happened six months ago, I saw it mentioned in The Wall Street Journal, he had this big, long production video of the future, 60 years from now. And he's like, "We're going to build the future, these towers, with robots, we're going to build it all," and it's like, oh my gosh, this guy is thinking long-term.

Muckerman: Using Arconic's products. As Fools, we appreciate that, and as Fools, we don't appreciate, at least I don't appreciate, what happened. I'm going to keep my eye on him and see where he ends up. If he doesn't choose to retire, I think somebody is going to want him on their board, or in their C-suite. I'd be interested which company that is. Hopefully they're public so I can follow along. 

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