Precision Castparts Corp.
|Subsidiary of Berkshire Hathaway|
|Industry||Aerospace and Defense|
|Founded||April 1, 1953Portland, Oregon, United Statesin|
|Headquarters||Portland, Oregon, United States|
(Chairman & CEO)
|Products||Investment castings, forged products, fasteners|
|Revenue||US$9.6 billion (FY 2014)|
|US$2.6 billion (FY 2014)|
|US$1.7 billion (FY 2014)|
|Total assets||US$18.5 billion (FY 2014)|
|Total equity||US$11.4 billion (FY 2014)|
Number of employees
|30,100 (March 2015)|
|Divisions||PCC Airfoils, PCC Structurals, PCC Energy Group,PCC Fasteners, PCC Aerostructures|
|Subsidiaries||Wyman-Gordon, Special Metals Corporation, Titanium Metals Corporation, Texas Honing Inc.|
Precision Castparts Corp. is an American industrial goods and metal fabrication company that manufactures investment castings, forged components, and airfoil castings for use in the aerospace, industrial gas turbine, and defense industries. In 2009 it ranked 362nd on the Fortune 500 list, and 11th in the aerospace and defense industry. In 2015 it ranked 322nd overall and 9th in the aerospace and defense industry. In 2014 it ranked 133rd on the S&P 500 based on market capitalization. In January 2016, the company became a subsidiary of Berkshire Hathaway. Before that event, it used to be one of the three Fortune 500 companies headquartered in Oregon.
Precision Castparts (PCC) was founded by Joseph Buford Cox on April 1, 1953. Cox was owner of Oregon Saw Chain and in 1949 had started a casting operation with assistant general manager Ed Cooley also working on the project. In 1953 Cox separated the two companies and PCC was formed, moving into a new larger facility in 1955, and incorporating the following year with Ed Cooley as one of the owners.
1960s and 1970s
Beginning in the 1960s, the company began to secure contracts to provide parts for jet engines. In 1967 they were awarded a contract by General Electric to provide parts for their TF39 engine and another contract with Pratt & Whitney. The following year the company was taken public and began work with Boeing. In 1968 Precision Castparts became a public company with the offering 120,000 shares of common stock to 1,100 new shareholders. By the 1970s PCC was also casting parts for body part replacements such as hips and knees.
1980s and 1990s
In the early 1980s, PCC expanded their facilities with several additions. In 1985 the company acquired a titanium foundry in Europe and built a new plant the next year in France. Over the next few years PCC acquired other companies such as Airfoils, and AETC Limited of Britain. In 1989, PCC was listed on the New York Stock Exchange, trading as PCP.
In 1991, Bill McCormick became CEO. Acquisitions continued in the 1990s with Advanced Forming Technology, ACC Electronics, Quamco, Astro Punch, and Olofsson Corporation. In 1997 PCC bought J&L Fiber Services, Pittler Maschinenfabrik GmbH, and Schlosser Casting Company. Over the next ten years the company continued to grow through acquiring other companies around the world in places such as Romania, Scotland, Switzerland, and Australia as well as companies within the United States including SPS Technologies. One of the company's largest purchases was the $990 million acquisition of Wyman-Gordon Company in 1999. They have also built or joined with partners to build plants in many countries around the world, including India, the Czech Republic, Hungary, China, and Malaysia.
2000s to present
In 2002, Mark Donegan became President and CEO. Precision received tax breaks from local governments in the Portland metro area in 2006 in exchange for a plant expansion. In 2007, the company purchased Cherry Aerospace to expand their fastener business. After ranking as the 568th largest U.S. company by Fortune in 2007, the company became a Fortune 500 the next year when it ranked 444, and rose to 362 in 2009. It is now ranked at 322.
PCC announced the purchase of Carlton Forge Works in October 2009 for $850 million and Primus International Inc. in July 2011 in a $900 million deal. Primus made parts for airplanes, selling their products to both Airbus and Boeing. In May 2012 PCC acquired Centra Industries Inc. a builder of aircraft parts for Boeing, Lockheed Martin, Northrop Grumman, Spirit AeroSystems, Mitsubishi Heavy Industries and Bombardier. They have two plants based in Cambridge, Ontario, Canada. Texas Honing was purchased by PCC in October 2012, followed by the $2.9 billion acquisition of Titanium Metals in November 2012.
On August 10, 2015, the boards of directors of Berkshire Hathaway Inc. and Precision Castparts Corp. unanimously approved a definitive agreement for Berkshire Hathaway to acquire, for $235 per share in cash, all outstanding PCC shares, for a total sum of $37 billion. The sale was finalized on January 29, 2016, on which date Berkshire Hathaway took ownership of Precision Castparts.
In May 2011, toxic chemicals such as nitrogen dioxide and hydrochloric acid were unexpectedly released at the company's titanium plant on Johnson Creek Blvd. Although four people were hospitalized, nobody was permanently injured from the fumes. Firefighters had difficulty shutting down the plant.
The Toxic 100 Air polluters index from the University of Massachusetts lists Precision Castparts as the number one air polluter in the U.S. in the August 2013 edition, which the company called a flawed study.
Listed on the New York Stock Exchange as PCP, the company was part of the S&P 400. In 2007, Precision was moved to the S&P 500 stock index. As seen in the table above, PCP's revenue increased by 52 percent in 2007, to $5.4 billion from $3.5 billion in 2006. Total debt increased by 29 percent, from $677 million in 2006 to $873 million in 2007. The increases in revenue and debt were due in part to a pair of acquisitions in February 2007: GSC Foundries, Inc. (GSC), formerly a competitor to PCP in producing aluminum and steel structural investment castings, and Cherry Aerospace LLC (Cherry), a manufacturer of aerospace blind rivets and blind bolts.
The company manufactures a variety of parts for the aerospace industry including many jet engine components. PCC also makes medical prostheses and parts for other industrial applications such as in the oil industry, in the gas industry, and for use in power generating turbines for producing electricity. They are considered a leader in the manufacturing of both jet engine airfoils and gas turbines used for generating electricity. The company generates $1.5 million in revenue for each Boeing 787 Dreamliner built. Other products made from the various metals are fasteners, products for the paper industry, parts used in the defense industry, and parts for the automotive industry. PCC's main markets are the United States, Europe, and Asia.
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The investment casting segment of Precision Castparts includes PCC Structurals and PCC Airfoils. It manufactures castings for aircraft engines, industrial gas turbine engines, airframes, medical implants, armament, unmanned aerial vehicles, and other industrial applications. They are the market leader in manufacturing large, complex, structural investment castings and the leading manufacturer of airfoil investment castings used in jet engines. The structural casting business manufactures the largest-diameter, nickel-based super-alloy, titanium and stainless steel investment castings in the world.
The Forged Products segment includes Wyman-Gordon, PCC Energy Group, Titanium Metals Corporation(Timet), and Special Metals Corporation and serves the aerospace and power generation markets. They produce engine components as well as airframe structural components for both military and commercial aircraft. They also produce mechanical and structural tubular products for use in energy markets.
The Airframe Products segment includes PCC Fasteners and PCC Aerostructures. It is the leading developer and manufacturer of highly engineered fasteners, fastener systems, aerostructures and precision components primary used in critical aerospace applications. In addition to the aerospace and gas turbine markets, this segment serves the construction, automotive, heavy truck and general industrial markets.
- "Precision Castparts 2012 Annual Report, Form 10-K, Filing Date May 31, 2012" (PDF). secdatabase.com. Retrieved June 8, 2012.
- Rogoway, Mike (January 30, 2016) [first published online January 29]. "Precision Castparts' $37B sale finalized". The Oregonian. p. C8. Retrieved 2016-02-02.
- Precision Castparts. Fortune 500: 2009. CNNMoney.com. Retrieved on April 20, 2009.
- Brett Krasnove (June 3, 2015). "Fortune 500". Fortune. Retrieved April 16, 2016.
- Dividend Channel (September 8, 2014). "Precision Castparts Takes Over #133 Spot From Kraft Foods Group". Forbes.
- History. Precision Castparts. Retrieved on February 28, 2008.
- "Welcome to Precision Castparts Corp.". Precision Castparts Corp.
- Giegerich, Andy. FTC orders Precision to sell Albany metals plant. Portland Business Journal, November 19, 1999.
- Read, Richard (July 10, 2011). "Portland-based Precision Castparts announces $900 million deal to buy Primus International". The Oregonian.
- Zuckerman, Peter. Precision's growth will bring 400 new jobs. The Oregonian, September 25, 2006.
- Hunsberger, Brent. Precision Castparts buys maker of fasteners. The Oregonian, January 9, 2007.
- "Fortune 500 2007". CNNMoney.com. April 30, 2007. Retrieved 2009-07-20.
- "Centra Industries Announces Sale to Precision Castparts Corp.". Bloomberg. 2012-05-07. Retrieved 2013-11-21.
- Siemers, Erik (October 8, 2012). "Precision Castparts acquires Texas Honing". Portland Business Journal. Retrieved October 8, 2012.
- Read, Richard (November 9, 2012). "Precision Castparts to acquire Titanium Metals in $2.9 billion deal". The Oregonian.
- "Welcome to Precision Castparts Corp.". www.precast.com. Retrieved 2015-08-10.
- Paul Koberstein (April 7, 2016). "Oregon Local News - Long history of Johnson Creek pollution winds back to Precision Castparts". Portland Tribune. Portland, Oregon. Retrieved April 16, 2016.
- Learn, Scott; Feulner, Natalie (August 6, 2011). "After a night of tension, confusion and a toxic cloud, Precision Castparts in Oregon says it will make changes to prevent a repeat". The Oregonian. Portland, Oregon.
- Read, Richard (August 26, 2013). "Portland's Precision Castparts ranked nation's top industrial air polluter in University of Massachusetts study". The Oregonian. Retrieved 9 November 2013.
- News Staff (August 29, 2013). "Precision Castparts: Pollution study 'deeply flawed'". KOIN 6. Retrieved 9 November 2013.
- Annual Report: 2006. Precision Castparts. Retrieved on February 28, 2008.
- 2007 SEC 10-K Form, page 26. Precision Castparts. Retrieved on May 28, 2008
- Precision Castparts to join S&P 500. CNNMoney.com. Retrieved on May 31, 2007.
- Precision Castparts Yahoo! Finance. Retrieved on February 28, 2008.
- PCP 2007 10-K, p. 24 via Wikinvest
- Strom, Shelly. Precision Castparts: Energy markets drive sales. Portland Business Journal, July 19, 2001.
- Read, Richard. "Boeing's newest bird takes a giant leap forward". The Oregonian, March 18, 2007.