The Timken Company (USA; NYSE: TKR) announced the Gambrinus Bearing Plant, on shutdown with a skeleton workforce since Fall 2009, will close within 60 days.

Several weeks ago, Timken reportedly sold off some of the excess equipment at Gambrinus.

The WARN (Worker Adjustment Retraining Notification) Act notice indicates 57 workers are affected, although most have been on indefinite layoff since late 2009. The salary employees are being let go entirely, while the hourly production workers, represented by Steelworkers Local 1123, 5251R9N7, are potentially in line to be called back for other open positions at Timken's Gambrinus Roller or Gambrinus Steel plants. Gambrinus Steel, in particular, has been boosting employment as demand for steel has gained steam in the past several months.

Timken 3/31/2010 WARN Act Notice
filed with Ohio Department of Job and Family Services
Timken spokesperson, Lorrie Crum, said: "The people affected here should have an opportunity to work in the steel business."

The potential for Gambrinus closing can be traced as far back as 2001. In 2004, Timken revealed it had been going through some difficult decision options for its Canton bearing manufacturing operations -- Canton Bearing, Gambrinus Roller, and Gambrinus Bearing -- for some time.

Canton Bearing, nearest the corporate headquarters, was opened in 1901, the company's first dedicated bearing manufacturing plant. The Gambrinus plants opened in 1928. During the height of U.S. bearing manufacturing, Timken plants were high-volume examples of how it should be done -- for example, Gambrinus housed the world's largest collection of automatic screw machines (for inners and outers), ID and OD grinders.

The plants, with their aging design and infrastructure, were unfriendly to modern manufacturing techniques and plant layout, gradually becoming among the least cost-competitive in Timken's manufacturing network.

In 2001, Timken began a manufacturing rationalization program, identifying plants and shifting production to facilities that were the most quality and cost-effective for a particular related product lineup, and with the most potential to fit Timken's future direction. At that point, the Canton area facilities came under scrutiny.

article: Timken unveils global manufacturing restructuring program
In late 2003, the plants' precarious situation went public when Timken officials expressed frustration with their lack of progress, despite over $100 million in recent capital investments. Timken management openly challenged workers and the Steelworkers to take more seriously the needs for change, make improvements, or be closed.

Mike Arnold, Industrial Group President, warned at the time, "the plants are unable to profitably win new business from equipment manufacturers."

From 1999-2003, sales of bearings produced at the three plants fell more than 27%, while the company allowed retirement and attrition to whittle the workforce from 2,100 to just over 1,300 by 2004.

In 2004, Timken went on the record as saying attempts to negotiate with the Steelworkers to make the bearing factories more competitive had been fruitless and that the plants would have to close within 2-3 years.

article: Timken may close three Canton-area bearing plants
In its 2004 plant closing announcement, Timken used uncharacteristically harsh terms: "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," said President and CEO Jim Griffith, "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 production to plants where they can be manufactured competitively."

The Steelworkers shot back with strongly worded statement, stating, "United Steelworkers of America officials today blasted Timken's surprise announcement today that it plans to close three bearing plants in Canton, Ohio that employ 1,300 workers. The union had been engaged with the Company in discussions designed to improve the cost-competitiveness of the plants." That same press release, however, quoted a Steelworkers official: "This announcement is an outrageous blindsiding attack. We have been waiting for them to bring a proposal to the table, and instead they deliver this cheap shot to the Canton community."

Shortly afterward, the two sides began negotiating earnestly about the future of the factories, potentially opening the labor contract a year early; it was set to expire in September 2005.

article: Timken and Steelworkers negotiating Canton-area plant closings
Unfortunately for both sides, the potential plant closings began to attract tremendous media attention during the 2004 U.S. presidential campaign. Negotiations essentially stalled as the political posturing and repercussions were allowed to die down.

In May 2005, Timken and the Steelworkers reached a tentative contract, which was initially voted down at the first vote in June, then accepted in September.

article: Timken and union reach accord for Canton area bearing plants
article: Workers reject new contract
article: Timken Canton workers accept new contract
With the economy stronger beginning in 2004, the plants were given more time as Timken needed production to meet growing demand, particularly for industrial bearings. In 2004, employment at the bearing plants was still relatively high -- 1,170 hourly and 170 salary. Also, charges that Timken was shutting down Canton manufacturing to move production overseas proved unfounded -- at least 80% was moved to other U.S. facilities.

However, the recent economic downturn saw demand fall off dramatically, and the capacity was no longer needed.

Since the downturn began in earnest, 550 workers moved to the steel plant, 140 retired, and 100 others left for various other reasons.

During 2009, the aged 1901 Canton Bearing plant was gradually phased out, and production consolidated to Gambrinus.

In September 2009, Timken announced Gambrinus Bearing was going on shutdown and the workers going on temporary layoff.

article: Gambrinus Bearing workers laid off
In another few weeks, only Gambrinus Roller will remain, employing approximately 200 manufacturing large industrial bearings.