Just two months since it spun off its specialty steel business to shareholders, The Timken Company announced multiple actions it is taking to improve the performance of its Aerospace business. Specifically, Canton, Ohio-based Timken will eliminate the management structure for that business and seek a buyer for its aerospace MRO parts business. More specifically, Timken will close an engine repair and overhaul operation in Mesa, Ariz., and an aerospace bearing plant in Wolverhampton, England.
As for the financial impact, Timken expects to record a non-cash charge of $110 to $120 million in the third quarter of 2014, and will cease reporting separate results for the Aerospace operations.
The Arizona plant was developed as a specialty center of parts manufacturing for aerospace engine repairs and refurbishment, including investment casting capability for turbine blades, vanes, nozzles, and turbine-engine hardware. In 2008, Timken purchased Extex Ltd., in Gilbert, Ariz., which develops and supplies compressor and turbine blades and vanes, shrouds, nozzles, and gears, among other products, for Honeywell, Pratt & Whitney, and Rolls-Royce engines families.
At the time of that acquisition, Timken indicated the Extex organization would provide base of 600 Federal Aviation Administration parts manufacturer approval (PMA) components that were to position it as a comprehensive supplier of fleet-support programs, including asset management for aircraft operators.
"Aerospace has been and will continue to be an important market for Timken," stated Richard G. Kyle, Timken president and CEO. "It fits the Timken Business Model well and we will continue to pursue challenging applications that value our technology and our service.”
However, Kyle noted the aerospace segment's overall performance has been weak, and said the company expects that the changes will improve returns and generate growth.
"We remain committed to creating value for customers in the aerospace industry and are confident that our efforts will improve the strength of our business for both customers and shareholders going forward," Kyle said.