Midsized Manufacturers Beat Slump by Embracing China, India
By John Helyar - Aug 26, 2011
On his frequent trips to Shanghai, Timken Co. (TKR) Chief Executive Officer James W. Griffith sees cars on freeways and cranes at construction sites powered partly by the steel bearings his company has made for 111 years.
“Tepid economic growth and unemployment dominate the headlines in the U.S., but there are opportunities for our products in developing countries,” he said. “In China, even in a bad year, the economy will grow 6 percent to 8 percent.”
At a time when factory production at many manufacturers is slowing, Timken, hydraulics supplier Parker Hannifin Corp. (PH) and machinery component maker Kennametal Inc. (KMT) posted three of the top four profit increases among 32 U.S. industrial companies in the two years ended June 30, Bloomberg Businessweek reports in its Aug. 29 issue. That beats Deere & Co. (DE), Caterpillar Inc. (CAT) and Navistar International Corp. (NAV), which ranked sixth, seventh, and 16th, according to data compiled by Bloomberg.
Timken, Kennametal and Parker Hannifin are benefiting from their focus on high-end niche products, which are difficult for competitors to duplicate or to undercut on price. In addition, the companies’ industrial components for transportation, energy and construction equipment are in high demand in fast-track economies including China and India.
Profit gains at these midsized, Midwest companies also have exceeded those of larger manufacturers, after aggressively shedding low-margin products and costs during the recession.
bloomberg.com |
