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The eBearing News
October 29, 2004
Timken Responds to Political Attacks
On Its Business Practices
copyright © 2004 eBearing Inc.
The Timken Company (USA) has responded to, "misinformation," and "recent political advertising and news
reports that are casting a shadow on our integrity."
Timken stopped short of the somewhat more colorful approach eBearing resorted to in our
diatribes almost six months ago, responding to a flood of politically-motivated business reporting.
Back in May 2004, eBearing tired of fielding the phone calls, email inquiries, and a flood of articles
written by the pop media pretending to understand manufacturing, and the bearing industry in particular.
These articles were written by poorly-informed, misinformed, and sometimes intentionally fact-manipulating
political reporters pretending to be neutral and business-savvy, but failing at both. When we tried to
set the record straight about what really drives manufacturing in North America, we enjoyed only partial success.
Since the following was posted and referred to by most of the organized media outlets, we succeeded in
correcting a few, but far from all, of the key sources of misinformation about manufacturing and the bearing industry
in the popular media. Several holdouts, most notably the Associated Press, remain to this day,
publishing nonsensical and error-filled reports linking long-term manufacturing initiatives
to short-term political motivations.
• eBearing commentary on pop media and manufacturing
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The entire text of the Timken press release follows:
Timken Responds to Misinformation, Affirms Commitment to Global Competitiveness
CANTON, Ohio, Oct. 23 /PRNewswire-FirstCall/ -- In response to recent political advertising and news reports,
The Timken Company today released the following statement:
The Timken Company is a successful example of a U.S.-based global manufacturer that is transforming itself not
only to survive - but also to thrive. One thing that has not changed, however, is the fundamental integrity that
has been a core value of this company since its founding more than a century ago. For 105 years, we have been
recognized for our strong sense of ethics. We are concerned that recent political advertising and news reports
are casting a shadow on our integrity, and we want to set the record straight.
Global competitiveness. The rules of manufacturing have changed. American manufacturing has to change with it in
order to survive. Customers and competitors are global, and competition is fierce. All of our facilities must be
globally competitive to survive.
The undeniable fact is that, despite significant investments and our associates' best efforts to improve
productivity, our Canton bearing operations are not competitive, as they exist today. For more than a year, we
have engaged in good-faith discussions with the United Steelworkers of America about the core issues affecting
the future of these facilities. Those talks are continuing. It is a business decision - not a political issue.
We have an obligation to our customers, associates and shareholders to manufacture products in competitive
plants. This is not an issue of sending jobs overseas. About 80 percent of the work from the Canton plants
would be transferred to other more competitive Timken plants right here in the United States.
Growth. Timken operates in global markets. Being competitive means being able to secure new business in the
markets we serve. If we fail in this effort, it will mean that our customers will buy from other sources - ones
that are based overseas. Much has been made of the fact that we are building a plant in China; this has no
connection with the decision to close the Canton bearing operations. The plant is a response to our success
in winning new business in the rapidly growing Chinese market. The Timken Company sales to China have been
growing at a rate of 35% over the last three years, and being there to serve local customer demand is critical
to our success.
Tax matters. The Timken Company has received no special federal tax advantages. Because we paid
approximately $371 million to fund our pensions over the past three years, benefiting our 15,000 U.S.
associates and 12,000 retirees, we properly deducted the entire amount for income tax purposes. Other
valid deductions offset the remainder of our federal tax liability for 2001 and 2003. However, we continue
to pay millions in state, local and other taxes.
Defense contracts. Aerospace sales, especially to the military are highly regulated. In keeping with our
nation's vital security needs, since 1933 the Defense Federal Acquisition Regulation, known as DFAR, has
required that certain materials used in national defense be made by North American-based companies. As a
manufacturer of highly engineered aerospace bearings, Timken in many cases is the only qualified North American
producer of certain specialized parts for military aircraft. Accordingly, the Department of Defense turns to
Timken. This small but important part of our business has shown only single-digit growth in the past four years.
Payments under the Continued Dumping and Subsidy Offset Act. Timken has received payments under the Continued
Dumping and Subsidy Offset Act (CDSOA). This law was introduced by Democratic Senator Robert Byrd of West
Virginia, passed by a bipartisan vote of Congress and signed into law by President Clinton. It should be
noted that President Bush has consistently opposed this law and recommended its repeal.
There is absolutely no connection of the steel tariffs invoked by President Bush to the payments received
by Timken under CDSOA. In 2002, a large part of the U.S. steel industry faced bankruptcy due to foreign
competition. In response, Congress passed laws imposing fines on foreign steel makers that dumped steel
in the U.S. market. Given the highly specialized nature of the Timken business, most of our products were
not covered or exempted. Section 201 had virtually no impact on our business.
Commitment to Canton. Whatever the outcome of our local negotiations over the future of the Canton bearing
plants, Timken will remain a very significant presence in Canton and Stark County. This is our global
headquarters and the home of steel operations as well as our state-of-the-art technical center. In the last
two years, we have added 170 professionals and technologists to the local workforce and have openings for at
least 100 more.
In conclusion.
Timken, like all U.S.-based manufacturers, will continue to face many challenges in the evolving global
marketplace. Continuously becoming more competitive will help keep Timken a formidable player around the world.
We will continue to change - as we have over our 105 year history-while remaining true to our core values
of ethics and integrity for the benefit of our customers, shareholders, associates and communities.
The Timken Company (NYSE: TKR) (http://www.timken.com) is a leading global manufacturer of highly engineered
bearings and alloy steels and a provider of related products and services with operations in 27
countries. A Fortune 500 company, Timken recorded 2003 sales of $3.8 billion and employed approximately
26,000 at year-end.
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- by Bruce A. Carr
from individual research,
tips and commercial sources.
Copyrighted material; unauthorized reproduction prohibited.
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Entire contents Copyright © 1999-2010, eBearing Inc. All rights reserved.
eBearing.com and "... for everything that moves" are registered trademarks of eBearing Inc.
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