In Third Layoff of 2015, Timken Cuts 40 Positions
Lebanon — Timken Aerospace, continuing to grapple with a downtown in its precision ball bearing business, is letting go about 40 workers at its Lebanon plant as part of a reorganization that involves transferring some functions to the parent company’s corporate headquarters in North Canton, Ohio.
The layoffs are the latest blow at the Lebanon plant, one of the city’s biggest manufacturing employers, which has already faced two rounds of layoffs this year — the first in April, followed by a second in June.
The Lebanon facility now employs fewer than 300 people, less than half the number it employed at its peak before the recession hit in 2008.
Timken officials have cited a decline in demand for helicopters used in oil and gas exploration, in addition to cutbacks in military spending, as the cause of the decline, which has forced the company to react by eliminating jobs.
Timken Aerospace’s precision ball bearings are used as components in helicopters, which are being used less frequently as the worldwide drop in oil prices curtails the need to develop new sources of petroleum.
Timken said in a prepared statement on Friday said that the “continuing restructuring” of Timken Aerospace was in response to “changing market conditions” and a need to “improve its cost position.”
As part of reorganization, Timken has ceased reporting results for Timken Aerospace as a stand-alone entity and instead merged the unit with Timken’s Mobile Industries division, which makes bearings, seals, lubrication devices and power transmission components for motorized industrial and consumer vehicles.
The consolidation will involve transferring customer service and purchasing department functions, currently handled by employees in Lebanon, to North Canton, with the transfer of those functions leading to a number of the layoffs.
Similar changes are occurring at Timken Aerospace’s plant in Keene, N.H., the statement said.
On Wednesday, Timken reported third quarter sales had declined 10 percent, to $707.4 million, and net income was $63.4 million, compared with a net loss of $21.9 million in the same period a year ago, when results were dragged down by restructuring charges related to the aerospace business. The company revised downward its full year outlook, estimating that sales are expected to fall about 8 percent to reflect “expected continued softening in many of its industrial end markets.”