March 28, 2003
War might mean more orders for Timken
By PAUL M. KRAWZAK
Copley Washington correspondent
WASHINGTON — The Timken Co. may get some increased business from the war in Iraq, according to Chairman W.R. “Tim” Timken Jr.
“We are a modest supplier of products to the military, and of course a lot of the more simple things like vehicles and trucks and everything do have a lot of bearings and steel products,” said Timken, who supports the war.
The Canton-based company, which had $2.6 billion in sales last year, is a leading manufacturer of highly engineered anti-friction bearings and specialty steel.
Timken was quick to add that “there is not one minute that we would ever wish there was a war so we could sell more products.”
But he said the invasion could cause a “little bit of an increase in demand in certain areas, and to the extent that we could serve the United States forces by getting them what they need when they need it, you can be sure we will do our best.”
The war also has affected the company by drawing away employees called up by the military reserves, he said earlier this week. He has been chairman of the family-founded company for 28 years.
Timken answered questions about Iraq after testifying before a Senate committee, which is reviewing his nomination by President Bush to be chairman of the Securities Investor Protection Corp. The nonprofit corporation recovers assets for investors after brokerages are liquidated. The chairman position is unpaid.
Although concerned about the loss of life in a conflict, Timken said, “I’m quite sure that it’s going to come out with a change of regime, and I think that’s going to be much better for not only America but for all of the world. I think the wisdom of doing this war when we’re doing it will be shown.”
Timken was a prominent contributor to Bush’s presidential campaign.
Company spokeswoman Carol Titus said there’s been a slight increase in sales of bearings to the government for military use since Jan. 1, compared with the previous year. It’s unknown whether the increased sales are generated by the war in Iraq, homeland security or a combination, she said.
The company does not reveal how much of its business is military. But analyst Mark L. Parr of McDonald & Co. estimated that less than 5 percent of Timken sales go to the Pentagon. Timken bearings are used in helicopter, tank and gun turrets, he said.
“Between Torrington (a company Timken recently purchased) and Timken, they have a fair amount of helicopter-related parts and also tank parts,” he said.
But he agreed with other analysts that the war would have little effect on Timken’s business, which is largely in the automotive and industrial sectors.
Military sales will not drive overall sales results, said analyst Holden Lewis of BB&T Capital Markets.
Timken believes the war is going well for the United States, even though the “quick collapse” of the Iraqi regime that some hoped for has not occurred.
Iraq poses a threat to the United States, he said. Timken said the war could have been avoided “if Saddam Hussein and the terrible people that are involved in his administration had chosen otherwise.”
He believes all Americans should support the troops.
“These people need that kind of support,” he said.
Timken motioned toward his son Kurt, who was among family members who attended his confirmation hearing. “This son is a police officer (in El Monte, Calif.), so we see the same kind of thing about them,” he said. “They need to be supported because they’re out there putting themselves in harm’s way for people every day.”