Canton, Ohio — Bearing manufacturer The Timken Co. plans to close two plants, sell one, and lay off 1,500 of its 20,500 employees. The move is part of a strategic refocusing of its manufacturing operations to improve productivity, says James Griffith, the company’s president and CEO.
The plan will include “the replacement of aging manufacturing turning processes with a state-of-the-art forge/turn supply chain,” as well as “more alliances for acquisition of materials and components for our bearing operations,” according to the company. It also will rationalize production to lowest total cost plants throughout its manufacturing system.
Griffith emphasized that the move will not result in a reduction in capacity, but is intended to allow the company to generate the same sales with fewer assets by being more productive and efficient. The restructuring is expected to shave about $15 million annually from operating expenses by the fourth quarter of 2001, and $50 million annually by the fourth quarter of 2002.
The program affects Timken’s worldwide manufacturing operations. Plant-floor space will be cut by more than a million square feet and inventory will be sliced by more than $25 million in value. Griffith said the company also will develop focussed factories for each of its product lines and implement Six Sigma practices for lean manufacturing.
Other initiatives include advancing state-of-the-art sensorized bearings into more complex modules for an expanding range of applications. As well, Timken plans to form an e-business unit to accelerate use of Internet technology to grow external business and increase the company’s productivity.
It also will form a joint venture with a competitor to produce bearing components in Brazil, which will reduce costs, and form an e-business joint venture with several leading manufacturing companies to provide web-based market resources and integrated logistics for industrial distributors.
“We’ll be a much more productive organization,” Griffith said. The program is intended to improve the company’s earnings capabilities.
Timken has not yet announced which specific plants will be closed and which factory will be sold.