RBC Completes Acquisition of Timken Standard Plant

Roller Bearing Company of America Inc. (RBC, USA) has completed its acquisition of The Timken Company (USA) Standard Plant's aircraft bearing operations in Torrington, Connecticut. The business is scheduled to open its doors January 5, 2004 as a new division -- RBC Aircraft Products Inc. -- using around 100,000 square feet of leased space in the Standard Plant (Timken continues to own the building itself) and includes some related products from Timken's Super Precision plant in Keene, New Hampshire. The product lines involved in the transaction tightly mesh with RBC's existing product lines. As an initial press release pointed out, "RBC focuses on the kind of higher volume, catalog product made at the Standard Plant. The plant manufactures aircraft control bearings, aircraft rod ends, radial bearings and aircraft track rollers." Timken will continue to operate its own manufacturing in other areas of the Standard Plant, employing approximately 100 people. They are involved in other types of aerospace and precision bearings, including automotive and outboard marine bearings. With few other reasonable options available to Timken for a divestiture of the airplane bearing operations, the move is widely seen as the best possible outcome for Timken, RBC, and the Standard Plant employees. Timken inherited the massive turn-of-the-century Torrington Standard Plant, and the Fafnir airframe bearing division housed there, when it acquired The Torrington Company from Ingersoll-Rand in early 2003. But the Standard Plant's product lines for airplanes is not a good fit with Timken's other aircraft and aerospace bearing business. By August 2003, Timken had officially announced plans to divest the Standard Plant's aircraft bearing operations. At the time, eBearing and others began to speculate that the most logical and mutually advantageous acquirer would be RBC. Key among the reasons is the fact that many senior RBC executives had once been employed by Torrington with responsibility for various Fafnir aerospace product lines produced at the Standard Plant. In October 2003, Timken revealed RBC would be acquiring those Standard Plant assets. In the final announcement, however, the companies have now revealed that RBC will also be acquiring certain aerospace bearing assets from Timken's Keene facility. Acquired in 1990, Timken Super Precision's 62-year-old, 195,000 square foot Keene plant (formerly Miniature Precision Bearings Inc.) gets approximately 40% of its sales from the aerospace segment. Neither Timken nor RBC clarified what equipment from Keene was included in the Standard Plant acquisition. The employment impact at Keene, which has regularly been hit by layoffs, is unknown. Beyond aerospace, markets for the plant's precision bearings are makers of medical, dental, semiconductor and precision manufacturing equipment. Although Timken included Standard Plant Fafnir operations in many of its plans, the operation's future was in doubt long before Timken came along. Torrington, under Ingersoll-Rand, repeatedly restructured and cut back the operation. Sources told eBearing that Torrington would have sold off or shuttered the Standard Plant, but Ingersoll-Rand felt Torrington as a whole was a more attractive acquisition candidate with the Standard Plant up and running. When Timken, with little related expertise or sales penetration for the Standard Plant product lines, acquired the operation, several employees there told eBearing they fully expected Timken to shut down or sell of the operation quickly. The only real surprise, according to many, is that it took RBC and Timken almost a year to find each other and complete the sale. Timken said it will continue to manufacture aerospace products as part of Timken Aerospace, including specialized, highly engineered bearings for critical applications such as jet engines, gearboxes, auxiliary power units, instrumentation and helicopters. Timken also produces bearings for aircraft landing wheels. "The aerospace market is important to us, and we will continue our strategy of providing our customers with advanced technology and highly engineered bearings for selected applications," said Mike Arnold, President of Timken Industrial. Most Fafnir Standard Plant employees has heard from are very satisfied with the result. RBC management, they point out, is still well-known to many employees, their loss seen as part of the "brain drain" afflicting Torrington in recent years as its star faded under Ingersoll-Rand. 190 Standard Plant employees related to the divested Standard Plant operation were let go by Timken; they were to be laid off effective December 19, but Timken and RBC did not complete the transaction in time for that to happen. Instead, Timken elected to furlough the 190 employees on December 19, officially keeping them on as Timken employees through January 2, 2004, while making them eligible for unemployment benefits. In addition, Timken furloughed their own 100 Standard Plant employees over the same period, but they will return to work as usual for Timken on January 5. With the termination and furlough arrangement, RBC can then interview and hire as their plans for the operation dictate. RBC can also reset health care coverage and other benefits. In fact, RBC has been holding job fairs in the Torrington area -- presumably aiming to staff the Standard Plant operations -- but has not publicly indicated how many people it expects to hire back and in what positions. An ex-Torrington employee told eBearing RBC also seems to be trying to bring out some of the skilled Standard Plant employees who quit in recent years out of frustration with Ingersoll-Rand or were lured away to what were perceived as more stable jobs elsewhere in the area. Also in consideration may be the union representation. Under Timken, Standard Plant employees were represented by the United Autoworkers, but RBC plants also have the United Steelworkers. Few believe RBC intends to maintain its presence in the aging Standard Plant for longer than absolutely necessary, given the condition of the facilities and the fact that Timken still owns the building. Many Standard Plant bearings are easily transferred to other RBC manufacturing locations and business units such as Heim, Nice and Industrial Tectonics. The only holdups may be related to stringent aerospace quality certifications which cannot simply be moved from one plant to another.