PRECISION CASTPARTS - Key Persons
On January 29, Berkshire Hathaway completed its acquisition of Precision Castparts Corp. for $37.2 billion.
Bill McCormick became chief executive officer of Precision Castparts in 1991. He had joined the company in 1985 as president and chief operating officer after a successful manufacturing career with General Electric. Shortly after arriving at the company, he asked Mark Donegan, also from General Electric, to join him. Donegan went to work as a supervisor in the Portland investment casting operations.
McCormick stepped into the CEO role at a time when the cyclical commercial aerospace industry was particularly bad. Airlines were canceling or stretching out the sizeable orders for aircraft they had placed late in the previous decade, and, with more than 80 percent of its sales in aerospace, Precision Castparts was feeling the pain deeply. The company's board of directors commissioned a study to determine what other types of businesses would generate profitable growth to smooth out the valleys of the aerospace cycle.
Job Titles:
- Assistant General Manager
Ed Cooley, assistant general manager for the company, began to spend more and more time with the casting operation and solicited outside work primarily from local businesses. This venture proved so successful that, by the spring of 1953, the casting division was made into a separate business and named Precision Castparts Corp.
Three years later, the company, owned by Cooley and two other individuals, was incorporated under the laws of the State of Oregon. The company pushed aggressively to make ever larger structural castings and, in 1962, purchased a vacuum furnace with the capability of pouring a part weighing up to 1,000 pounds. That moved the business far ahead of its competition and resulted in several contracts for large aircraft engine castings.
Precision Castparts is formed with Joseph Cox as owner and president; Cooley is GM with 20 employees. The original building is located on SE 13th, Portland, OR
Job Titles:
- Founder and President of Oregon Chain Saw Manufacturing Co
Mr. Cox needed to affordably cast his new cutter, so the investment casting side of the business was born.
The Cox Chipper Chain is still considered the biggest influence in the history of timber cutting.
In 2001, Mark Donegan was named president and chief operating officer of Precision Castparts, and in August of the next two years, he took on the roles of chief executive officer and chairman, respectively. As mentioned earlier, Donegan joined the company as a manufacturing supervisor in Portland in 1985. The acquisition of the airfoils business created many new career opportunities in the company, and Donegan went to Cleveland to run a small ceramic core facility and, soon afterwards, a large aerospace airfoil plant. He returned in the early 1990s to lead the structural casting business through some of the toughest times in the company's history - driving out costs, reducing lead times, enhancing relationships with long-time customers, and adding important new customers.
With the acquisition of Wyman-Gordon in late 1999, Donegan headed to Massachusetts to turn what had been an ailing business into a strong, vital enterprise with significant opportunities for profitable growth. In all of these assignments, he developed a keen focus on a manufacturing operation's daily metrics and the requirements for a business's long-term success.
The aerospace industry was mired at the bottom of one of its cycles when Donegan took the reins as chief executive officer. He seized this downturn as an opportunity. Confident in the operations' ability to reduce cost structures going forward, Donegan offered major aerospace customers deflationary pricing in exchange for longer term contracts and market share gains. This approach proved so successful that, when the new contracts kicked in at the beginning of 2003, the company had the largest number of parts under development in its history. As these components moved into production, and the cycle ramped back up, Precision Castparts achieved unprecedented sales levels.
While continuing to drive the daily manufacturing discipline through the plants, Donegan focused on profitable growth by diligently pursuing strategic acquisitions that complemented the company's core competencies. In late 2003, the company acquired SPS Technologies, a manufacturer of fasteners, primarily for critical aerospace applications. Just as Wyman-Gordon had, SPS served as a platform on which to build an all-new segment: Fastener Products. Since the acquisition, five additional fastener businesses have been added to expand its complement of products to offer to aircraft and engine customers. Cannon-Muskegon, a manufacturer of nickel-based alloys for the casting industry, was also part of the SPS deal and enabled Precision Castparts to meet all its casting requirements for nickel ingot internally.
PCC moves to its Johnson Creek facility (still in operation today) and grows to 40 employees.