Published February 28, 2025
Precision Castparts vs Howmet: Culture and Pricing Power
inpractise.com/articles/precision-castparts-incentives-and-single-crystal-turbine-blade-casting
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What do you mean by 1x?
The hourly folks were making 1x of that bonus target. Young engineers, mid-level, and admin people were making 2x. Experienced individual contributors were making 3x, considerably more. They had a different pool and bonus calculation. Everyone in the facility had a bonus coming and was focused on it. We wouldn't give as much information to the hourly people, but we informed them of what they could influence. I've never seen so many Lexuses, BMWs, and Mercedes in a manufacturing operation parking lot, many driven by hourly people.
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How did that translate into results relative to Howmet?
I can tell you that Precision Castparts, the operations I worked at, both in structurals and airfoils, consistently achieved over 30% EBIT. For a manufacturing company, that's incredible. PCC Airfoils, particularly the high-performing units in Ohio, Minerva and Beechwood, sometimes exceeded 40%. They were producing single crystal airfoils and DS airfoils, the most complex parts out there.
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