Klaus Kleinfeld, the Davos Man brought to earth

Talking to students at Yale School of Management in 2012, Klaus Kleinfeld spoke about the importance of feeling free. “The moment you give that up, you give up a lot,” he said. “You basically give up the pleasure of looking yourself in the face in the mirror and saying ‘that’s me’.”

It was a characteristic line from a man who projects ebullient self-confidence, even when it has seemed that the world was against him. That quality has made him a great salesman for the businesses he has run and for himself. But this week, his self-reflection will not have been very gratifying.

Under pressure in his role as chief executive of Arconic, the specialised metals and components company created in the break-up of Alcoa last year, Mr Kleinfeld made a bizarre unforced error that has cost him his job.

Elliott Management, the activist investment fund founded by the formidable Paul Singer, a scourge of underperforming executives, took a stake in Alcoa in 2015, and began pushing for better profit margins and corporate governance. The fund started campaigning openly in January for Mr Kleinfeld to go, blasting him for “poor leadership culture” and “an abysmal record of shareholder return”.

As he battled to save his position, Mr Kleinfeld sent Mr Singer, who is a keen football fan, a match ball from the 2006 World Cup, and a letter alluding to his time at the tournament. “People who accompanied you in Berlin in 2006 during and especially after the many matches you attended are still full of colourful memories,” Mr Kleinfeld wrote.

Elliott concluded the letter had only one possible interpretation: it “read as a threat to intimidate or extort”. The fund passed it on to Arconic’s directors, and Mr Kleinfeld swiftly stepped down “by mutual agreement”.

Reports in Germany suggested Elliott had misinterpreted a message intended as a personal appeal from Mr Kleinfeld to Mr Singer over their shared love of the game. Either way, it was a humiliating turn for a career that had survived a bribery scandal at Siemens, the engineering group where Mr Kleinfeld was chief executive until 2007, and growing shareholder discontent over his leadership of Alcoa and then Arconic.

Tall, sharp-suited and self-assured, a German who ran one of the great names of American industry for eight years, Mr Kleinfeld is an archetypal grandee of global business. An alpha professional CV is burnished with the extracurricular activities — marathon running; advisory director of the Metropolitan Opera — of the well-rounded executive. He talks fluently about recycling and cutting emissions, has a genial manner and ready laugh — but can also machinegun you with statistics to make a point.

Reports suggested Elliott had misinterpreted a message intended as a personal appeal from Mr Kleinfeld to Mr Singer over their shared love of football

His global connections include advisory roles to the mayor of Shanghai, the Chinese premier Li Keqiang, Russian prime minister Dmitry Medvedev, and President Donald Trump. He is a regular speaker at the World Economic Forum’s meetings in Davos, and sits on its board of trustees. When people talk about “Davos Man” as a caricature of the well-meaning international business elite, Mr Kleinfeld could be the model.

His origins were a long way from the alpine bolthole of the global elite. “I didn’t have any financial freedom when I started,” he said in his talk at Yale. “My parents were immigrants from East Germany. And a lot of crap happened.”

After escaping the communist East, his parents lived in the West German port city of Bremen, where he was born in 1957. His father, who worked as a labourer in a shipyard and studied to become an engineer, died when Klaus was 10, and he took his first job stacking shelves in a supermarket aged 12.

He joined Siemens in 1987 and made a name at its internal consulting unit, cutting costs and restructuring troubled businesses. In 2005, aged 47, he became the youngest chief executive since Siemens was unified in the 1960s. It was the high point of his career, but his triumph was shortlived. He quit in 2007 after it emerged that Siemens employees had been paying bribes totalling hundreds of millions of euros. Mr Kleinfeld was never accused of wrongdoing, but as CEO the buck stopped on his desk. The supervisory board refused to back him.

He landed on his feet at Alcoa, where he had been a director since 2003. The move took him back to New York, where he worked with Siemens at the turn of the century, along with his wife, a teacher, and two daughters.

Alcoa had a great history. It was founded in Pittsburgh in 1888 by Charles Martin Hall, a pioneer of smelting aluminium, and in 1928 had half the world’s production capacity. But it also had a troubled present, threatened by new capacity from China. The methods that worked for Mr Kleinfeld at Siemens failed to deliver at Alcoa, and the share price has underperformed the market.

Mr Kleinfeld built an escape raft, expanding the operations making advanced metals to perform in extreme conditions such as jet engines. These became Arconic when Alcoa split, and he stuck with them. He also kept the trappings of the old company, including a head office on Park Avenue, and a pay packet that was $16.8m last year, generous for a company of Arconic’s size.

In a letter to Arconic’s board in February, Elliott described Mr Kleinfeld as “a uniquely charismatic figure” who had used close ties to its directors “to secure his continued employment notwithstanding his performance”. In the end, the one thing he could not be saved from was himself.

The writer is the FT’s US industry and energy editor