(Bloomberg Businessweek) -- You can’t find a clearer example of the steel industry’s disagreement over the Trump tariffs than in Canton, Ohio, where the tariffs are pitting Timken against Timken. TimkenSteel Corp., which makes steel bars and tubes along with other products, likes the tariffs, which will raise prices of domestic steel. Timken Co., which buys steel to make bearings and other transmission parts, isn’t so hot on them.
The two companies share roots in Henry Timken’s 1898 patent for a tapered roller bearing, which was originally used for horse-drawn carriages. The company split in two in June 2014 under pressure from shareholders, but both sister companies kept their headquarters in greater Canton. A lot of people still own shares in both companies. Timken Co. is bigger, with $3 billion in 2017 revenue, and it’s profitable. TimkenSteel had 2017 revenue of $1.3 billion and has lost money every year since it went independent.
Ward J. “Tim” Timken Jr., the chief executive officer of TimkenSteel, was in the room with other steel executives on March 1 when President Trump made the surprise announcement that he would impose 25 percent tariffs on imported steel. “We view it as a very positive thing,” Timken said. He later issued a statement: “This is a meaningful step toward restoring fair trade, which will strengthen both the U.S. steel industry and America’s national security. Our 2,800 employees, most of whom are in Ohio and work in manufacturing operations, have been energized because they know that when trade is fair, they can go toe-to-toe with any company in the industry.”
Timken Co., by contrast, didn’t issue a statement about the Trump tariffs. I asked the company for its position last week. On March 26, it gave me this statement: “As a global manufacturer, we believe in fair, open and competitive trade. We import very little steel bar and tube covered by Section 232 and expect minimal direct impact to our business in 2018. Longer term, we do not view steel tariffs as a positive development for our domestic manufacturing operations and are also concerned that higher U.S. steel costs could negatively impact the global competitiveness of many of our U.S. customers. Additionally, this order presents risks for escalating trade retaliation, and we will closely assess any indirect impact on our business beyond 2018.”
I’m guessing that tariffs are an awkward topic when Timken Co. and TimkenSteel people get together these days.
To contact the columnist of this story: Peter Coy in New York at pcoy3@bloomberg.net.
To contact the editor responsible for this story: Eric Gelman at egelman3@bloomberg.net.
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