The Timken Company (NYSE:TKR) today announced that it will close its production facility in Sao Paulo, Brazil, by the end of the year. Timken will maintain a sales, marketing and warehousing presence in Brazil to meet the needs of customers and distributors.
The closure of the Sao Paulo facility will improve the performance of Timken’s Automotive Group by eliminating manufacturing redundancies and further aligning its global footprint to expected levels of demand going forward.
"We continue to implement our initiatives to manage our portfolio and improve the performance of Timken’s Automotive business," said Jacqueline A. Dedo, president of the company's Automotive Group. "Following the dramatic decline in vehicle production by certain North American customers that occurred in 2006, we are balancing our manufacturing capacity to more closely match demand levels going forward. Given the redundancies in production, we have been consolidating product lines in fewer, more focused factories to improve efficiency and reduce fixed costs."
The closure of the facility in Brazil is part of Timken’s ongoing efforts to improve the performance of its Automotive Group. The company previously announced a restructuring initiative in 2005 and a workforce reduction in 2006, which are on track to deliver expected savings of approximately $40 million and $35 million, respectively, by 2008. Since 2005, the company has reduced Automotive employment by more than 2,500 positions, including those associated with the divestment of its global steering business.
The Sao Paulo plant opened in 1960, and produced tapered roller bearings ranging in size from 0 to 8 inches last year. It currently employs approximately 300 people.
"Timken’s sales in Brazil have been growing in key industrial, automotive and aftermarket segments," said Andrew Frisbie, managing director for Central and South America. "We expect to build on our market position going forward as we extend relationships with our customers and distributors in this important market."
Timken will support its future growth in the Brazilian market with its global manufacturing resources, along with new warehousing operations and a network of 35 distributors located in Brazil.
About The Timken Company
The Timken Company (NYSE:TKR, http://www.timken.com) keeps the world turning, with innovative friction management and power transmission products and services that enable customers to perform faster and more smoothly and efficiently. With sales of $5.0 billion in 2006, operations in 26 countries and approximately 25,000 employees, Timken is Where You Turn™ for better performance.
Certain statements in this news release (including statements regarding the company's estimates and expectations) that are not historical in nature are "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. In particular, the statements related to expected savings and costs of the company’s programs and initiatives are forward-looking. The company cautions that actual results may differ materially from those projected or implied in forward-looking statements due to a variety of important factors, including the company’s ability to respond to the changes in its end markets, especially the North American automotive industry, and the company's ability to achieve the benefits of its future and ongoing programs and initiatives. These and additional factors are described in greater detail in the company's Annual Report on Form 10-K for the year ended Dec. 31, 2006, page 40.The company undertakes no obligation to update or revise any forward-looking statement.