A foundry operator at Precision Castparts pours an element into the molten metal alloy to make it even hotter so that it will completely expand and grow into the mold.Benjamin Brink/The Oregonian

Precision Castparts' astonishing decline accelerated last quarter, according to new financial filings, and the struggling Portland company now it expects it will have eliminated 40% of its global work force by the end of the year.

That works out to more than 13,000 lost jobs worldwide. Precision Castparts said in July that it had laid off 717 in Oregon and hasn’t updated that figure or said how many remain at its facilities in the Portland area and in Redmond.

Precision Castparts makes heavy-duty metal components for airplanes, electricity generators and other industrial products. Aircraft manufacturing has been devastated by the pandemic, which has severely disrupted air travel, and by Boeing’s stumbles with its defect-plagued 737 model.

“The pandemic and related macroeconomic factors continue to weigh on the nation and the aerospace industry, and many of our customer have needed to reduce production rates in response to these factors,” Precision Castparts said in a statement Monday. “Due to the resulting impact on orders, we have aligned our production and our workforce with our customers' needs, including at our Portland-area operations. We will continue to monitor business conditions and manage staffing appropriately.”

Berkshire Hathaway, Warren Buffett’s investment firm, paid $37 billion for Precision Castparts in 2016. Investors and analysts have long maintained that Buffett grossly overpaid for the Portland company and Buffett now apparently agrees. Berkshire Hathaway wrote down the value of the Portland company by $10 billion in August.

At that time, Precision Castparts had eliminated about 10,000 jobs worldwide. But Berkshire Hathaway’s quarterly filings Monday indicate the situation has deteriorated considerably since then.

Precision Castparts' third-quarter sales totaled $1.5 billion, down 41.4% from the same quarter of 2019. Sales in the first nine months of 2020 were down 26.7%. The Portland company’s profits were down 80% last quarter.

“The COVID-19 pandemic contributed to material declines in commercial air travel and aircraft production,” Berkshire Hathaway said in Monday’s quarterly filing. “Airlines responded to the pandemic by delaying delivery of aircraft orders or, in some cases, cancelling aircraft orders, resulting in significant reductions in build rates by aircraft manufacturers and significant inventory reduction initiatives being implemented by (Precision Castparts') customers.”

Precision Castparts has taken $300 million in charges this year to cover the costs of restructuring and writing down inventory, according to Berkshire Hathaway.

The Portland company had been struggling with unspecified production problems even before the pandemic hit, and its revenue had grown little since the Portland company’s 2016 sale.

-- Mike Rogoway | mrogoway@oregonian.com | twitter: @rogoway | 503-294-7699

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