The Timken Company (USA; NYSE: TKR) revealed it has completed the pending sale of its automotive steering system components business unit.

Note: Timken subsequently reported a $54.3 million loss on the sale.

The buyer, DriveSol Worldwide Inc. [website], based in Troy, Michigan, is a division of Sun Capital Partners, [website], a private equity investment firm based in Boca Raton, Florida.

DriveSol was created in mid-2005 when Sun acquired and renamed the Automotive Pedal Division of Teleflex, Inc. DriveSol had 2005 sales of just over $140 million. The company describes itself as, "a leading manufacturer of pedals, adjustable pedals, electronic throttle control pedals (“ETC”), and other highly-engineered driving solutions for the global automotive industry."

The move continues Timken's automotive business unit overhaul, jettisoning another nonstrategic operation inherited via its early 2003 acquisition of Torrington from Ingersoll-Rand. Steering has been chronically operating at a loss, according to Timken executives, particularly as the North American auto industry demand has fallen off in recent quarters.

The acquisition of Steering ads another dimension, separate but related, to DriveSol's product line. Steering customers are currently both automotive OEMs and Tier 1 suppliers.

DriveSol said it will take over both Timken steering gear facilities -- in Watertown, Connecticut, and Nora Friburgo, Brazil.

Both facilities have engineering, R&D, and sales & marketing, employing a total of 900 people; 600 in Watertown and 300 in Nova Friburgo.

DriveSol CEO, Mark Simon, said the two facilities will continue operating as they are, for now. However, Mr. Simon also noted the slide in orders from North American automakers may result in future layoffs: "Certainly, you can understand the competitive pressure we are under in the automotive business. We need to stay competitive."

Mr. Simon went on to comment: "The acquisition of this steering column business is another step forward towards implementing our long-range strategy of becoming a global business leader in driver control systems and puts us back into the steering column / pedal subsystem market where we once supplied Land Rover and other European OEMs. As the automotive electronic drive-by-wire concept evolves, we will now be in the position to offer our customers full brake, accelerator, and steering-by-wire plug-in systems. With Timken's Brazil facility, we have become a truly globally integrated steering / pedal product development company with the combined engineering and research, development, and manufacturing resources effectively in the North America and South America, East and West Europe, Japan and China markets."

Since it acquired Torrington in early 2003, Timken has gradually divested all of the unrelated and nonstrategic Torrington operations and facilities -- now including all operations in Connecticut -- leaving only the central needle bearing plants and related holdings.