By Doug Cameron
The chief executive of the company expected to become the newest
member of Warren Buffett's stable is a numbers guy who has turned
Precision Castparts Corp. into one of the aerospace sector's most
prolific deal makers and cost-cutters.
Mark Donegan, Precision Castparts' chairman and chief executive,
has spent 30 years at the Portland, Ore.-based company, which
supplies specialist parts to aircraft and engine makers, and which
is now the target of Mr. Buffett's Berkshire Hathaway Inc.
Only the third CEO since Precision Castparts was founded in
1953, Mr. Donegan has done dozens of deals to make the company an
increasingly crucial part of the aerospace supply chain as Airbus
Group SE, Boeing Co. and engine makers such as General Electric Co.
and Rolls-Royce Holdings PLC boost production to deliver a backlog
of more than 10,000 passenger jets.
Mr. Donegan has bought up firms that specialize in materials
such as titanium and ceramics that are being increasingly used to
reduce the weight and boost the efficiency of aircraft. That has
boosted what he calls the company's "share of wallet" on the new
breed of aircraft and engines such as the Boeing 787 and the
fuel-efficient Leap being developed by GE's CFM joint venture,
Mr. Donegan has a reputation as a micromanager who makes
frequent visits to the factory floor in pursuit of efficiency
gains. His pursuit of lower costs has allowed Precision Castparts
to gain market share in the aerospace and energy sectors, trading
price for larger volume with customers while still boasting
industry-leading operating profit margins, which reached 25.7% in
the most recent quarter.
An accounting graduate from Villanova University near
Philadelphia, Mr. Donegan joined Precision Castparts in 1985 from
GE, where he held several management roles and completed its
manufacturing management program. He is now one of the aerospace
industry's highest-paid executives, with total compensation in
fiscal 2015 of $15.8 million, including a salary of $1.59 million.
He owned about 226,000 shares, or about 0.16% of the company,
according to its latest proxy in July, which listed his age as 58.
His stake was worth about $44 million as of Friday.
From a start at Precision Castparts managing specialist metal
castings at its Portland base, he moved on to manage the company's
Wyman-Gordon Co. subsidiary in his native Massachusetts after it
was acquired in 1999.
"I have been in manufacturing 50 years, and Mark Donegan is one
of the best operational managers I have ever encountered," said
former Precision Castparts CEO William McCormick after promoting
the executive to become president and chief operating officer in
2001.
A year later Mr. Donegan was named as CEO, adding the chairman
role in 2003.
Write to Doug Cameron at doug.cameron@wsj.com
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