Precision Castparts Corp. (NYSE:PCP) makes specialized metal products for the aerospace and power generation industries. PCP's large, complex structural investment castings, airfoil castings, and forged components are used in jet aircraft engines and industrial gas turbines (IGT). Large jet aircraft engines are manufactured by a small number of suppliers, including General Electric, Pratt & Whitney, and Rolls-Royce. Because of the complexity of its castings, and their end-use in dangerous machinery, PCP has long-term relationships with the companies that buy its products. It has been supplying large castings for jet engines to GE for more than 40 years and Pratt & Whitney for 30+ years, while supplying smaller structural castings to Rolls-Royce for over 25 years. The company earned $5.5 billion in revenue and $922 million in net income in 2010.^[1]

PCP uses a number of raw materials to make its castings, including certain metals such as cobalt, titanium, nickel, tantalum and molybdenum, which are found in only a few parts of the world and are available from a limited number of suppliers.^[2] To combat the risk of rising input costs, PCP acquired Special Metals Corporation (SMC), a world leader in the production of high-performance, nickel-based alloys and super alloys. SMC, in conjunction with PCP's existing high performance alloy production facilities in western Australia and the U.S., made PCP the world’s largest and most diversified producer of high performance nickel-based alloys, supplying over 5,000 customers.

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