The Timken Company
Address:
1835 Dueber Ave., S.W.
Canton, Ohio 44706-2798
U.S.A.
Telephone: (216) 438-3000
Fax: (216) 471-3452
Statistics:
Public Company
Incorporated: 1899 as Timken Roller Bearing Axle Company
Employees: 16,729
Sales: $1.6 billion
Stock Exchanges: New York
SICs: 3562 Ball and Roller Bearings; 3312 Blast Furnaces and Steel Mills.
Company History:
The Timken Company is the world's largest manufacturer of tapered roller bearings. A tapered roller bearing consists of a set of rolling elements between two concentric rings. The design of these bearings, based on Henry Timken's patents from the late 19th century, allows them to virtually eliminate friction created in hauling heavy loads. Timken bearings are used in a wide variety of industries, including automotive, aerospace, and railroads. MPB Corporation, a wholly owned subsidiary of Timken, produces super-precision and miniature bearings, whose applications include missile guidance systems and computer disk drives. Timken also produces about 1.5 million tons of steel alloy each year, and is the leading manufacturer of Seamless mechanical steel alloy tubing in the world. The Latrobe Steel Company, another wholly owned subsidiary, produces more than 300 grades of steel. Among the uses of Latrobe's products are components for automobile axles and fasteners for space shuttles. While Timken's steel facilities are concentrated in the United States, the company as a whole has operations in 20 countries on 6 continents, totalling 100 plants and offices overall.
Henry Timken founded the earliest form of The Timken Company in St. Louis in 1899. Timken had entered the carriage business as an apprentice 40 years earlier at the age of 16. By the time he was 24, Timken had opened his own carriage shop. In 1877 Timken received the patent for the Timken Buggy Spring, the first of his 13 patents. His spring design became widely used throughout the country, and was produced on a royalty basis by a number of companies. As a result of the spring's success, Timken became well known across the United States, and his carriage business flourished. Around 1895 Timken took an interest in the problems created by friction in wagon design. In 1898 the patent was issued for the Timken tapered roller bearing. The new bearing was a dramatic improvement over the ball bearings and straight roller bearings that had previously been used. The following year, the founder and his two sons, William and Henry (H. H.) Timken, organized the Timken Roller Bearing Axle Company. The company produced axles that used the new bearing in their design.
Within the next couple of years, the axle business began to outgrow its allotted space in the St. Louis carriage plant, and in 1902 the company relocated to Canton, Ohio. Canton was seen as an ideal midpoint between Detroit, home of the automotive industry, and Pittsburgh, a steel-producing city. By that time, the Timkens had recognized the future importance of the automobile, and worked to develop bearings tailored to the needs of that young industry. When Henry Ford introduced the automobile assembly line and the Model T that it produced in 1908, the demand for Timken bearings and axles grew exponentially. In 1909 the Timken brothers broke off the axle division and moved it to Detroit, launching the new Timken-Detroit Axle Company with William Timken as its president. The Canton operation continued to manufacture bearings, and its name was changed to The Timken Roller Bearing Company. By 1909, the year Henry Timken died, the company was turning out over 850,000 bearings a year, and it employed about 1,200 people.
Timken began to produce its own steel in 1915 as a way to ensure an adequate supply for its manufacturing in the face of shortages created by World War I. That year, the company added a steel tube mill to its Canton facilities. A year later a melt shop was added. With the inclusion of these steel works, Timken became the first bearing manufacturer to act as its own supplier of steel for its products. The company was soon producing steel in quantities far greater than its own manufacturing needs. It therefore began marketing its alloy steel to outside buyers, with such companies as the Mack Truck Company among its early regular customers. In 1919 the Industrial Division was organized, taking the place of the company's Farm Implement and Tractor Division. The mission of the Industrial Division was to develop bearings for a wide variety of industrial uses, including electric motors, elevators, and printing presses.
The market for Timken bearings and steel continued to expand quickly throughout the 1920s. In 1920 the company opened the Columbus Bearing Plant, its first facility outside of Canton. The same year, a waste treatment plant was built at the Canton facility. Timken stock went on sale to the public for the first time in 1922, and the company opened an assembly plant in Canada that year. Timken bearings found their way into the railroad industry in 1923, when bearings specially designed by Timken were tested first on an inter-city streetcar running between Canton and Cleveland, and later that year in a boxcar on the Wheeling and Lake Erie Railroad. By 1926, other railroads recognized that the tapered bearings would allow the speed of their trains to increase. A large order was placed by the Chicago, Milwaukee, St. Paul & Pacific railroad for use in its high speed trains, such as the Burlington Zephyr and the Santa Fe Super Chief.
Timken began acquiring smaller companies in the mid-1920s. In 1925 the company purchased the assets of Gilliam Manufacturing Co., a Canton-based roller bearing producer. The Bock Bearing Co. of Toledo, Ohio, was acquired the following year. In 1927 Timken purchased a large interest in British Timken Ltd. from Vickers Ltd., which had been manufacturing Timken bearings and axles under license since 1909. Timken went on to acquire the remainder of the British operation in 1959. The Weldless Steel Company's Wooster, Ohio, piercing mill was purchased in 1928. 1928 also brought the creation of Societe Anonyme Francaise Timken (SAFT), a French subsidiary of British Timken. In 1929 Timken purchased a 177-acre block of land adjacent to the company's existing facilities in Canton, and opened two new plants, the Gambrinus Steel Plant and the Gambrinus Bearing Plant.
In spite of the Depression, Timken continued to grow steadily through the 1930s. During the early 1930s the company developed bearings for propeller drive-shafts, thereby expanding its customer base to include shipbuilders, including the U.S. Navy. In 1932 Timken began manufacturing removable rock bits for construction and mining equipment. The production of the rock bits provided a much needed outlet for the company's steel in the face of a badly depressed steel market. By that year, British Timken had stretched to yet another continent, opening a manufacturing subsidiary in South Africa in 1932. In 1934 William Umstattd became president of Timken, succeeding H. H. Timken, who stayed on as chairman of the board. The company's Mt. Vernon Rock Bit Plant opened the following year. When H. H. Timken died in 1940, his son, H. H. Timken, Jr., became the chairman of Timken's board of directors.
The onset of World War II provided the momentum for Timken's continued growth in the 1940s. To meet increasing wartime demand for its products, Timken opened several new facilities in Ohio during this period. In 1941, for example, the Timken Ordnance Company was built in Canton, where about 80,000 gun tubes were built over the next couple of years. The Zanesville Bearing Plant was opened in 1943. Other new locations included Columbus and Newton Falls. During the war, the company's output more than doubled its previous peak. In 1948 Timken began experimenting with automation, beginning a pilot project at a plant in Bucyrus, Ohio. The project was an instant success, and a brand new plant was built in 1950.
Meanwhile, Timken was the subject of an antitrust suit brought by the Justice Department around the same time. After several levels of appeals, the Supreme Court ruled in 1951 that Timken had conspired with its foreign affiliates (British and French Timken) in restraint of trade. The case, initiated in 1947, came about as a result of agreements between the companies regarding sales territories, price coordination, exchange of exclusive information, and other practices. The court's ruling indicated that a company must compete with other companies in which it holds a substantial interest if that company is not a legal subsidiary.
In 1954 Timken introduced the "AP" bearing, an innovation that would have a great impact on the railroad industry. The "AP" was a preassembled, prelubricated, self-contained bearing that was inexpensive and easily integrated into nearly any type of railroad car. The new bearing was credited with dramatically reducing the number of freight car set-outs. The "AP" bearing was initially produced at Timken's Columbus plant. So quickly did demand for it grow, however, that by 1958, the new Columbus Railroad Bearing Plant was opened. In 1956 the Bucyrus Distribution Center was opened. The Distribution Center was a huge warehouse, from which bearings were shipped to customers throughout the United States, as well as to the company's foreign plants. In 1958 Australia became the fourth continent on which Timken operations took place, with the opening of a bearing plant at Ballarat, Victoria. That year, SAFT was officially merged into Timken, and its name was changed to Timken France. Timken purchased the remaining shares of British Timken the following year.
Around this time, Timken began its expansion into South America. A sales subsidiary was established in Argentina in 1959. 1960 marked the opening of the Sao Paulo Bearing Plant in Brazil. That year, W. Robert Timken (another son of H. H. Timken) replaced Umstattd as company president. Timken's sales continued to grow steadily through the first half of the 1960s, climbing from $240 million in 1961 to $393 million in 1966. In 1963 production began at the company's new Colmar Plant in France. Timken Research, a sprawling research and development center located near the Akron-Canton Airport, was completed in 1966. Railroads continued to grow in importance as customers during this period. By 1968, more than 90 percent of the new freight cars being built used tapered roller bearings, and more than 60 percent of those bearings were made by Timken.
During the second half of the 1960s, Timken's sales levelled off, and net income actually shrank, from $49 million in 1966 to $29 million in 1970. The portion of this income that came from foreign sales tripled between 1967 and 1970. In 1968 a continuous casting plant was added to the company's steelmaking facilities. By 1969, the plant had a capacity of 850,000 tons. The company's Ashland Plant was opened in 1969 as well. Timken had a total of 16 plants in operation by 1971, seven of which were in Ohio. Tapered roller bearings and rock bits accounted for about 80 percent of Timken's revenue that year, with specialty steels generating the rest of the company's sales. At that time, about 35 different types of roller bearings were being produced in over 11,000 sizes at its facilities.
H. H. Timken, Jr., died in 1968, and was succeeded as chairman by his brother W. Robert Timken. The company presidency was assumed by Herbert Markley, who had joined the company as an accountant nearly 30 years earlier. In 1970 the corporation's name was officially shortened to The Timken Company. The following year, the Gaffney Bearing Plant, a highly automated facility in South Carolina, was opened. Timken was hurt in 1970 by strikes at General Motors and in the trucking industry. By 1972, however, sales were once again strong in the automotive industry, which, as a whole, was the purchaser of nearly half of the bearings sold by Timken. As a result, Timken's sales began to grow once again, reaching a company record of $470 million in 1972. In 1974 a wholly owned sales subsidiary, Nihon Timken K.K., was formed in Japan.
W. Robert Timken stepped down in 1975, and was replaced as chairman of the Board by his son, W. R. Timken, Jr. That year Timken acquired Latrobe Steel Company, a Pennsylvania-based producer of specialty steel and alloys. For 1975, Timken was able to post record sales of $804 million, in spite of a terrible year in the automobile industry. In 1978 construction was completed on the company's Canton Water Purification Plant. Timken introduced the UNIPAC bearing in 1979. These pre-lubricated and pre-adjusted bearings made assembly operations much easier for vehicle, industrial machinery, and construction equipment manufacturers. Timken also opened the Lincolnton Bearing Plant that year. The Lincolnton plant, located 50 miles north of Gaffney in North Carolina, featured such advanced automation as driverless trains that transported parts between departments. 1979 also brought about Markley's mandatory retirement as company president. He was succeeded by Joseph F. Toot, Jr., a Timken employee since 1962.
As the 1980s began, Timken was still the dominant force in the American bearing industry, controlling about 25 percent of the U.S. bearings market, and 75 percent of the market for tapered roller bearings. In 1981 the company earned $101 million on sales of $1.4 billion. The 1980s proved to be a difficult decade for Timken, however. The company reported a loss of $3 million in 1982, its first unprofitable year since the Depression. Part of the problem was the flood of cheap bearings entering the United States from Europe and Japan. Nevertheless, Timken did not stop investing in its facilities during this time. In 1983 an expansion project that doubled the size of Timken Research was completed. The company's $450 million Faircrest Steel Plant went into production in 1985. Upon the opening of the plant, which was situated not far from Canton, Timken's steelmaking capacity increased by 50 percent, to 1.5 million tons. In 1986 Timken reorganized its corporate structure, cutting costs by consolidating departments and eliminating personnel. The Rock Bit Division was sold off entirely. A new division, the Original Equipment--Bearings group was formed by combining the Industrial Division with the Automotive and Railroad Divisions. In addition, all Research and Development functions and computer operations were organized into a newly created Technology Center.
After six years of showing little or no profit, Timken rebounded in 1988, earning $65.9 million on net sales of $1.55 billion. During that year offices were opened in Italy, Korea, Singapore, and Venezuela. The following year, a 37-day strike by steelworkers prevented a significant continuation of the rally. Nevertheless, a $1 billion multi-year investment program was launched in 1989 to modernize and expand the company's plants. In 1990 Timken paid $185 million for MPB Corporation, a manufacturer of super-precision bearings (used in sensitive machinery such as aircraft, computer disk drives, and medical equipment) based in Keene, New Hampshire, with annual sales of $120 million.
Timken's sales declined slightly in both 1991 and 1992, largely due to reduced demand caused by the global recession. For 1991, the company recorded a net loss of $36 million. Through an active streamlining program, Timken was able to turn a modest profit of $4.45 million in 1992 without making any gains in sales. In April of 1993 the company announced the formation of a steel sales unit in Europe, its first such steel operation outside of the United States. Efforts to improve manufacturing efficiency and to reduce costs throughout the corporation continued. Construction began on a new bearing plant in Ashboro, North Carolina, in 1993, the same year the company began operations at a steel parts plant in Eaton, Ohio. Latrobe Steel planned to open a new facility in Franklin, Pennsylvania, in 1994.
The Timken Company is widely recognized as a well-run company that manufactures products of the highest quality. Because this status has been achieved to a large degree by a willingness to invest heavily in research and facility modernization, it seems likely that Timken will be able to fight off any challengers that might arise in its own industry. The most serious challenges that the company faces are those that arise from its dependence on the health of the many different industries whose companies integrate Timken bearings and steel into their own products.
Principal Subsidiaries: Latrobe Steel Company; MPB Corporation.
Further Reading:
Byrne, Harlan S., "Timken Co.: It Spends Big to Compete in Global Bearings Market," Barron's, August 6, 1990, pp. 31-32.
"From a Lost Law Fight, a $4-Million Market," Business Week, November 5, 1955, pp. 62-63.
"Great-Grandpa Can Smile Again," Forbes, May 28, 1990, pp. 226-28.
History of the Timken Company, Canton, OH: The Timken Company, 1990.
McManus, George J., "Timken Steers Its Own Course--Successfully," Iron Age, May 10, 1976, pp. 33-40.
"Must Affiliates Compete?," Business Week, April 28, 1951, p. 25.
"Recession Buying Speeds Timken's Automatic Look," Business Week, September 20, 1958, pp. 160-62.
"The Road Points Only Up," Forbes, June 1, 1968, p. 66.
Thomas, Dana L., "Rough to Smooth," Barron's, March 6, 1972, p. 3.
The Timken Company 1992 Annual Report, Canton, OH: The Timken Company, 1992.
"Timken Rolling at Fast Clip," Financial World, February 14, 1973, p. 20.
"Timken: Rolling Up Gains," Financial World, September 22, 1971, p. 7.
"Timken: Well-Prepared for Future Shocks," Sales and Marketing Management, January 17, 1977, pp. 40-42.
Weiss, Gary, "Timken's Folly?," Barron's, November 25, 1985, p. 13.
"Why Timken's 'Stability' Will Save Its Bottom Line," Business Week, May 17, 1982, pp. 107-08.
Source: International Directory of Company Histories, Vol. 8. St. James Press, 1994.
