Canton Repository

June 15, 2001

Steel imports less of a factor for Timken 

Copley News Service

WASHINGTON — Unlike some steel makers, the Timken Co. has not been dramatically affected by steel imports, W.R. “Tim” Timken, chairman and chief executive officer, said Thursday.

And the company is unlikely to play much of a role in a new federal investigation of steel imports, which is aimed at determining if they have caused substantial damage to U.S. steel makers, he indicated.

Last week, the Bush administration launched the probe after months of pressure from U.S. steel makers who complain that imports are driving them out of business.

But Timken, who is also chairman of the National Association of Manufacturers, said the strong U.S. dollar and imports have had some impact in reducing sales of Timken’s specialty steel.

Timken’s main product is high performance bearings, but steel accounts for about one-third of its business. The company reported $2.6 billion in overall sales last year.

“The Timken Co. is selling less steel today at lower prices because of the huge amount of imports coming into this country, both of steel product and of
course, even more importantly perhaps, products that are made from steel,” he said. “Every Japanese or Korean automobile that comes in doesn’t have
U.S.-made steel in it, it has Japanese- or Korean-made steel.”

The company has seen the most competition with its high performance specialty steels made by its Latrobe subsidiary.

That is “directly impacted because the majority of our competition is in Europe, and with the euro where it is, that has been very seriously impacted,” he said.

Because the dollar is strong compared to the euro, American-made products are more expensive compared to European imports.

Timken’s tubular and bar steel also have felt some competition, he said.

“We don’t necessarily think there is unfair trade (in the kind of steel made by Timken) but the dollar in its strength can create unfair trade if it keeps moving
in the direction it is,” Timken said. He and other executives from the manufacturers association have urged Treasury Secretary Paul O’Neill to promote a lower value for the dollar to make American products more affordable.

Timken favors the administration-initiated probe of steel imports, which he said will lead to scrutiny of unfair trading practices.