Buffett's piece of Worcester
Wyman-Gordon has a rich history in Worcester, dating back to 1883 when it was founded as a manufacturer of crankshafts for looms. Through many decades and industrial transformation, the company was able to stay relevant, evolving into its modern-day status as a manufacturer of specialized, forged components made from titanium- and nickel-based alloys used by the aerospace and energy industries.
Today, Wyman-Gordon employs about 550 in the region at operations in Worcester and North Grafton, and has facilities in a handful of other states. So when Berkshire Hathaway, the multinational holding company owned by billionaire Warren Buffett, announced last week its plans to buy Wyman-Gordon's parent company, Precision Castparts Corp (PCC) in early 2016, in what will be the largest deal in Berkshire Hathaway's history, the buzz in Central Massachusetts was no surprise.
What's in it for Berkshire Hathaway?
In a statement, Buffett recognized PCC for its leading edge in serving a specialized niche in the aerospace industry, saying he has long admired the Oregon-based company.
“For good reasons, it is the supplier of choice for the world's aerospace industry, one of the largest sources of American exports,” said the 85-year-old Buffett, who is known for long-term value investing. His strategy is widely considered a gold standard for investors seeking to make wise decisions.
What's Wyman-Gordon's history with PCC?
PCC agreed to acquire all of Wyman-Gordon in 1999 for an estimated total of $825 million, according to a company statement released in May of that year.
“The combination of our respective businesses should result in a stronger entity that will be able to capitalize on opportunities that we could not realize on our own,” former Wyman-Gordon chairman and CEO David Gruber said at the time.
Today, PCC sees the acquisition by Berkshire Hathaway as a “unique alignment between (Buffett's) management and investment philosophy” and the company's long-term management strategy, according to Mark Donegan, PCC's chairman and CEO.
“This transaction offers compelling and immediate value for our shareholders, and allows PCC's employees to continue to operate in the same manner that has generated many years of exceptional service and performance to our customers,” Donegan said in a statement.”
Will this impact Central Massachusetts operations?
It's unlikely operations in Worcester and North Grafton will change significantly, according to a spokesman for PCC. Letters were sent to all PCC employees when the deal was announced, stating that operations are expected to remain largely the same following the sale.
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