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The Timken Co. and NSK Ltd. April 8 agreed to form a joint venture, Timken-NSK Bearings (Suzhou) Co. Ltd., that would build a plant near Shanghai, China, and manufacture certain tapered roller-bearing products.
The joint venture — which would be evenly divided between Timken and NSK — plans to begin building the facility later this year and start production in early 2004.
The plant would specialize in producing single-row tapered bearings used in medium- to high-volume applications, such as automotive and certain industrial applications.
Plant equipment would come from Timken's United Kingdom facility, which the company plans to close, and from NSK's Japan operations.
Timken and NSK plan to produce bearings to each company's specifications, and then independently market the products under their respective brands.
The joint venture would enable Timken to more-effectively deal with its global customers by establishing Asian manufacturing capacity for small-size automotive products, said Timken President and Chief Executive Officer James Griffith in a prepared statement, adding that the company also could reduce manufacturing costs by adding a lower-cost product source.
Meanwhile, Timken April 16 reported first-quarter net income, including restructuring and reorganization charges, of $9.2 million compared with $11.4 million in first-quarter 2001; sales totaled $615.8 million compared with $661.5 million last year.
The company's automotive-bearing sales increased 5 percent to $203.7 million, which Timken officials believe reflects the continued strength of North American vehicle production and new automotive platforms launched
with Timken products, contributing about $10 million to sales.
Timken in April 2001 launched a manufacturing restructuring program designed to rationalize plant operations and create a global factory network that would focus on producing specific product lines or components, as well as reduce manufacturing costs $100 million by the end of 2004.
The company's manufacturing-operation restructuring and lower administrative spending so far has helped Timken achieve an annualized
savings rate of $35 million. Company officials believe Timken's initiatives will help the company produce an annualized savings rate of $80 million by year end.