What is in this article?:
- PPGâ€™s Team Player Takes His Place at the Top
- Seeking Talent and Diversity
CEO Michael McGarry has a rich history with PPG, but his focus is on a future where the global manufacturer extends its lead in the coatings sector.
Our goal is extend the gap between us and the rest of the competition. We can only do that by driving better innovation, better technical service, and support of our customers.
- Michael H. McGarry
Title: President and Chief Executive Officer
Organization: PPG Industries
The IndustryWeek Manufacturing Leader of the Week highlights the manufacturing leaders, executives and stars who are driving growth in today's industry and helping to shape the future of manufacturing.
It would be understandable if Michael McGarry exhibited a touch of nerves these days. After all, he’s in a new job, taking over as president and CEO of PPG, a global manufacturer of coatings and glass with annual sales of $15.3 billion, on September 1. He assumed the helm of a company that is not only big but successful, with a long streak of record revenue quarters. And the man he succeeded, Charles Bunch, was just named one of the top 100 CEOs by the Harvard Business Review.
But in a recent interview at PPG’s landmark headquarters in Pittsburgh, McGarry instead demonstrated the cool command of his job that comes with spending a long and successful career at PPG. Educated as a mechanical engineer at the University of Texas, McGarry joined PPG 34 years ago at its former facility in Lake Charles, La. Since then, he has had 22 jobs with the company that have taken him around the world. But McGarry quickly establishes that his focus is on the future.
“If we're not moving forward, somebody is catching up to us,” he says. “Our goal is extend the gap between us and the rest of the competition. We can only do that by driving better innovation, better technical service, and support of our customers. Innovation and our customers will be the keys to our success.”
While PPG is an acronym for Pittsburgh Plate Glass, the company has steadily moved away from glass manufacturing, which now makes up just 5% of the business. PPG today is a company overwhelmingly focused on coatings for everything from so-called architectural purposes (for example, the paint on your house or your kitchen walls) to sophisticated coatings for automobiles and aircraft.
In the transportation field, McGarry explained, PPG is a partner with automakers and aircraft firms in helping them shave costs from production while at the same time meeting their evolving needs as new materials are introduced in cars and planes to increase fuel efficiency.
“You have the auto industry moving away from plain old steel to aluminum and composites,” McGarry notes. “They can’t do that without the support of the coatings companies. They want plastic bumpers to look exactly like the aluminum hood which looks exactly like the steel on the doors. You have all these different substrates but you want a perfect paint job.”
PPG’s role in coatings development also extends to energy efficiency. He spoke about the deep purple color found on Southwest airplanes. That color would ordinarily retain heat, resulting in the interior of planes sitting at the gate becoming overly warm. That would force Southwest to invest in more air conditioning units for the planes. But PPG developed a heat management coating that reflects heat from the planes.
“We allowed them to achieve the branding without spending the money on additional power units,” said McGarry.
Given these types of challenges, PPG maintains a robust research and development organization. The company’s Coatings Innovation Center at Allison Park, Pa., has 310 employees. McGarry says the company spends more on R&D than any of its competitors.
“The scientists that we have working on our coating technology are the most important technologists in the company,” McGarry notes, adding, “If you go out into our Allison Park facility, you’ll see the United Nations of technologists because we recruit tech people from around the world to drive innovation. We have really good innovators.”
PPG has operations in 70 countries. McGarry says PPG is dedicated to growing regionally, noting that the company now sells its products in 140 countries but “there are a lot more than that.”
McGarry says PPG makes coatings around the world because “to a certain extent it is like shipping water. It is costly to ship coatings so we produce locally.” That emphasis on serving individual markets also extends to customer support.
“A lot of the coatings space needs top-notch technical support,” McGarry says. “We help our customers set up lines so they can run more efficiently, use less paint and move coated parts through a line faster.”
In recent decades, many U.S. manufacturers have looked principally to China for international growth. Asked about the slowdown in the Chinese economy, McGarry says that was having more of an impact on commodity products than the products PPG is involved with aimed at the middle class, such as for cars or appliances. He also expressed confidence in the Chinese government’s ability to manage the economy.
“Has it slowed down in China? Absolutely. But the areas we are in are not slowing nearly to the extent that the rest of China has,” asserts McGarry. “We still think it will have a very good long-term, positive growth trend.”
PPG has built a good portion of its business through acquisitions, and McGarry cites the ability to integrate these acquired firms into PPG as a “core competence” of the company. He said PPG takes a disciplined approach to assessing acquisition candidates and “passes on a lot.” For architectural coating firms, McGarry said, the company looks for companies that are either number one or two in their market, or that help with regional positioning. For industrial coating companies, PPG seeks acquisitions that will help them acquire new technologies, or provide greater penetration into a market such as aerospace.
“For each segment, we have a very specific goal in mind,” says McGarry. “It is not one size fits all.”
PPG’s largest acquisition was the SigmaKalon Group, a global coatings firm based in the Netherlands that PPG bought for $3.2 billion in January 2008. PPG did not have an architectural coatings business in Europe at the time so it left that part of the business largely operating as it was. However, it took the industrial and protective marine parts of the company and integrated them with corresponding PPG units.
McGarry says PPG tries to share best practices both ways with newly acquired companies.
“We know every company we buy does something really well,” he notes. “Our goal is to find what they do well and bring it inside PPG.”
McGarry says PPG strives to make sure that the leaders of acquired firms understand they can now operate in a larger enterprise that offers more opportunities. At least half of the top executives in PPG joined the company as a result of acquisitions, he points out, including direct reports such as Marcos Achar Levy, the CEO of PPG-Comex, the Mexican coatings company that PPG purchased for $2.3 billion in November 2014.