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The eBearing News
August 5, 2003
Timken Pursuing Sale of
Torrington Standard Plant
copyright © 2003 eBearing Inc.
The Timken Company (USA) announced yesterday it is, "exploring strategic alternatives for its Standard
Plant in Torrington, Conn., including the sale of the facility." Timken inherited the aging Standard
Plant in its acquisition of Torrington earlier this year.
The Standard Plant currently employs 277 people producing Fafnir brand aerospace bearings: airframe
control bearings, rod ends, and track rollers.
Constructed in 1906 to manufacture needles as The Standard Company -- before Torrington was a bearing
company -- the Standard plant is considered a historic landmark of Torrington's manufacturing
operations. It was electrified in 1912. The Fafnir aerospace bearings produced there since 1992 are
what remains of the Aerospace Business Unit, once occupying a 600,000 square foot plant in Newington.
The Standard Plant announcement comes as Timken works to address a sagging share price and investor concerns about its
financial performance. It also follows up on a recent pledge to improve the company's financial position
and answer Wall Street critics who say the company has surprised and disappointed them with
unexpectedly poor earnings amidst slow-to-materialize Torrington acquisition benefits.
Many in the bearing industry will not be surprised by Timken's move -- prior to the acquisition, Torrington
itself had repeatedly considered plans that involved shuttering the money-losing facility -- but Timken has
not named any potential buyers for the Standard Plant.
In late July, Timken announced the troubled Fafnir ball bearing facility in Rockford, Illinois would
close, after finding no buyers.
• article: Timken will close Torrington Fafnir ball bearing plant in Rockford
Sizing up potential buyers
Because Timken did not name a company or companies, if any, it may be negotiating with for the Standard
Plant -- perhaps involving the entire Fafnir identity -- eBearing decided to take a look and size up the
list of candidates.
The obvious contenders, ignoring arch rivals INA and SKF, are New Hampshire Ball Bearings (a Minebea division),
Kaydon Corporation, McGill (an Emerson division), and Roller Bearing Company of America, Inc. (RBC). Narrowing
to McGill or RBC, we believe RBC is the most likely buyer, based on a number of factors.
However, as with the Rockford, Illinois plant, it is possible Timken may choose to simply close the facility
if it is unable to negotiate a sale.
RBC
Over 33% of RBC's corporate-wide sales, or almost $57 million, are to the aerospace market for applications in
commercial and military aviation.
Although spread across several operating divisions, RBC's existing plants already manufacture
a virtually overlapping lineup to Fafnir's airframe control bearings, rod ends and track rollers.
In essence, production could be easily absorbed by RBC manufacturing and distribution.
RBC's senior management is intimately familiar with the Fafnir and Standard Plant operation, with three out of
five senior executives having held senior positions at Torrington. Dr. Michael Hartnett, Chairman, President and CEO,
spent 18 years at Torrington and was VP/GM of the Aerospace Business Unit. Richard Edwards, RBC VP/GM, was with
Torrington for six years at Tyger River. Christopher Tomas, RBC's VP-Business Development, spent seven years
at Torrington's Precision Components and NASTECH businesses.
With a history of buying similar businesses, RBC now has a lineup of twelve operating divisions, including
Tyson Bearings, Heim, RBC Linear, RBC Nice, Bremen Bearings, Industrial Tectonics, and others. The Fafnir operations
would dovetail with these, and a recently-installed credit facility freed the company to make further
acquisitions (RBC has made ten acquisitions in the past ten years).
RBC may have been more prescient than expected in its latest annual report section covering SKF, Timken,
INA and other competitors: "The balance of the domestic market, consisting primarily of specialty and custom
engineered bearings, is more fragmented. Due to the shorter production runs and significant post-sale
technical support associated with these products, we believe they are not the primary focus of the larger
bearing manufacturers. A group of smaller companies, including ourselves, frequently establish leading positions,
in market share and reputation, in certain of these niche product lines."
The annual report also listed a key RBC business strategy as, "acquiring other manufacturers which have
complimentary products, similar distribution channels or provide significant potential for margin enhancement."
Timken statement
Timken said, "The options being considered for the Standard Plant are part of the company's continuing
strategy to focus its plants to be globally competitive in the product that each manufactures and to integrate
its acquisition of The Torrington Company. As part of this process, Timken is reviewing all of its businesses,
including the Standard Plant."
Michael Arnold, President - Industrial Group, said, "We have taken actions over the past three years to
transform The Timken Company into a global enterprise. As part of these actions, we have focused on deploying
our assets to achieve profitable growth and to maximize value for our shareholders. By evaluating the
strategic options for the Standard Plant, we are continuing to pursue this direction."
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- by Bruce A. Carr
from individual research,
tips and commercial sources.
Unauthorized reproduction is prohibited.
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eBearing.com ... for everything that moves™
Entire contents Copyright 1999-2008, eBearing Inc. All rights reserved.
eBearing.com and "... for everything that moves" are registered
trademarks of eBearing Inc.
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eBearing.com ... for everything that moves™
Entire contents Copyright © 1999-2008, eBearing Inc. All rights reserved.
eBearing.com and "... for everything that moves" are registered trademarks of eBearing Inc.
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