Timken Co. closing three plants where 1,300 are employed
CANTON, Ohio (AP) – The Timken Co. plans to close three Canton bearings plants that employ 1,300 workers and shift most of the production to other U.S. plants. Friday’s announcement gave no timetable for the shutdown but it followed months of discussions between the company and union officials over how to make the plants, which are among the company’s oldest, more productive.
“It’s just all about being competitive,” Timken spokesman Jason Saragin said.
The company said production at the three plants has declined 27 percent over the last five years and closing the plants would improve its overall profitability. Timken and its union must negotiate whether employees will be transferred to the company’s other plants, Saragin said. One of the plants being closed was its first and was built in 1901. Timken’s Canton-based steel operations are not affected by the decision. The company employs about 26,000 people worldwide. In September, United Steelworkers of American officials said the company told workers that the three plants could close unless the company became satisfied with their competitiveness with manufacturers that produce similar products cheaper, many at operations outside the United States. Timken told employees in a letter previously that the bearings plants needed to show improvement in customer response, lower plant costs and operating costs and focus more on production. “We have been meeting with the union for more than eight months to discuss how to make our bearing operations competitive in our changing global marketplace,” James W. Griffith, Timken’s chief executive, said in a news release Friday. “We are disappointed that our talks with the union did not lead to the changes necessary to make these facilities viable. Therefore, we will begin moving the products to plants where they can be manufactured competitively.” Stan Jasionowski, president of Steelworkers Local 1123, which represents workers at all of Timken’s Canton-area plants, said the company was overstating the nature of the talks with the union.
He said that workers twice over the past few years have cut costs at the plant by 30 percent and increased production.
“We’ve done everything in the past that we can do to help this company,” he said.
Timken has been troubled for several months, but in the appeared to be rebounding. The company doubled earnings to $28.4 million in the first quarter on record revenues of $1.1 billion as demand by industrial, steel and automotive markets increased.
by double-digit rates
Before that, Timken revised its annual earnings estimate three times in 2003. That year the company also removed the president of its automotive group and announced 900 job cuts, mainly within the automotive operations.
The company’s stock fell and its credit rating was downgraded to junk by Moody’s Investors Services last fall – the first time Timken’s 104 years that its rating was dropped below investment grade.
In February, Timken completed a $840 million purchase of Torrington, a subsidiary of Ingersoll-Rand Co. The acquisition expanded the company’s automotive and industrial bearings-based products, but the deal was overshadowed by Timken’s financial problems that weakened investor confidence.
Timken manufactures highly engineered bearings and alloy steels. It has operations in 27 countries and had sales of $3.8 billion in 2003.
In late morning trading on the New York Stock Exchange, Timken shares were up 5 cents at $21.49.
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On the Net:
http://www.timken.com
AP-ES-05-14-04 1254EDT