Timken to Lay Off 20 Workers
Lebanon — The Timken Co. is laying off about 20 employees who work in the operations group at its manufacturing plant in Lebanon as the company reacts to a downturn in the demand for helicopters used in oil and gas exploration and a decline in inventory among major customers.
The North Canton, Ohio-based company confirmed Thursday the layoffs at its Lebanon plant, which is part of the company’s aerospace business, and cited falling oil prices as one of the primary reasons for the cuts.
“Declining demand in the helicopter market related to the slowdown in oil and gas exploration as well as inventory reductions by significant customers resulted in our decision to reduce staffing of our operations at our aerospace plant in Lebanon. About 10 percent of the operations groups is impacted by these reductions, which we communicated to employees earlier this week,” Timken spokeswoman Gloria Irwin said in an email.
The move contrasts with recent trends at other major Upper Valley employers, who reported an uptick in employment as the economic recovery gained momentum last year.
Nonetheless, in the past week, the national employment picture also took a hit. The U.S. economy added only 126,000 jobs in March, the weakest growth in more than a year, according to the Labor Department. And on Thursday, the Labor Department reported that the advance figure for seasonally adjusted initial unemployment insurance claims rose to 281,000, an increase of 14,000 from the previous week’s revised level.
Timken’s Lebanon plant is estimated to employ about 300 people, down from 500 people in 2011 and 700 before the recession hit in 2007.
The Lebanon plant makes precision ball bearings that are used in turbine engines and transmissions for the aviation industry.
While many industries slowly recovered after the recession officially came to an end in 2009, aerospace has lagged as the supply of helicopters and fixed-wing aircraft exceeded demand for their use.
Last year Timken eliminated separately reporting financial results for its aerospace business as part of a restructuring that merged the operations into another unit of the company.
At the time, Timken CEO Richard G. Kyle acknowledged the aerospace segment’s “overall performance has been weak,” but affirmed the company remained committed to the business.
Timken, facing pressure from shareholders, spun off its steel business into a separate company from its ball bearing and transmission business in 2014. Sales in the steel business also have declined because of lower demand in the oil, gas and industrial markets.
In January, Timken said it expected net sales to increase about 1 percent this year after offsetting for the currency exchange rate, and earnings are projected to be 85 cents to 95 cents per share, compared to $1.82 per share last year. The earnings are expected to be reduced as the result of various settlement and cost-reduction charges.
Without those charges, Timken said, earnings are expected to be $2.65 to $2.75 per share.
John Lippman can be reached at jlippman@vnews.com or 603-727-3219.
