As chairman of The Timken Co., Ward “Tim” Timken Jr. has a dual role: He plots the vision for the $5.7 billion global manufacturer and its 25,000 employees, and he also meets with elected officials to ensure the company’s voice is heard on proposed regulations that might affect not just Timken but any manufacturer.
The current economic meltdown hasn’t helped his cause on either front.
“In part, the private sector has itself to blame,” Timken says.
He cites Wall Street greed, exploitation of a relaxed regulatory environment and a hunger to live beyond our means as reasons why much of the American public today views business as part of the problem.
“The challenge before business leaders is to make a compelling case for their ability and determination to develop solutions to the problems we face,” he says.
Timken shared his views on the role executives should take in public policy matters as well as his thoughts on manufacturing’s future at a recent Smart Business Live luncheon. Here are some excerpts.
Remain optimistic. Many of us have seen declining sales, shrinking profits and tight credit markets. Industries across the region have been forced to reduce employee benefits and let some good workers go. Despite the trouble, I remain optimistic about the future.
It is inevitable in a free market system that individual enterprises come and go, yet the market endures. It is precisely this flexibility and agility that gives our economy its legendary ability to bounce back stronger than ever. In this cycle of renewal, we continually redeploy our resources to newer and better uses, expanding our ability to create greater prosperity for all.
Know the effects of public policy. Public policy changes threaten a structural transformation. If we were only talking about opinion polls and statistical trends, we might not worry too much. We might console ourselves by saying that, like our sales orders, public trust in business would bounce back once the economy began growing again.
Unfortunately, these changes in public sentiment are accompanied by changes in public policy that are structurally transforming our economy and making it more difficult for the market to demonstrate its trademark resiliency.
In early 2008, when trust in U.S. business was at its highest ever … anyone who would have predicted then that within a year the federal government would nationalize General Motors and take a major ownership in the country’s largest banks would have been dismissed as a crackpot. Yet, that is the reality we face today. Not since the Great Depression has the government intervened so dramatically and decisively in the economic life of the nation.
Be a change leader. There are many benefits to the growing environmental awareness that has swept across the world of business and public opinion. We are stewards of the earth and should find new and better ways to use our precious resources.
There are many companies across our region eagerly tackling some of our most pressing environmental challenges. Today, we are investing heavily in new technology and production capabilities to help make wind energy a more viable and widely available power source.
In Timken’s case, and many others, the entrepreneurial spirit, combined with innovation, has been a powerful force for positive change. Government’s role should be to help us unlock the power and focus it on the greatest challenges we face, such as climate change, not legislate it.
Position for the future. One of the areas we see with potential for growth is on the wind energy side, renewable resources. We are investing ahead of the curve to make sure we understand our role in it and create value for our shareholders by being the company positioned to take advantage of that market. The main shaft bearing in a 1.5 megawatt turbine is about 8 feet tall. There are about three companies in the world that can make it. We’re one of them.
Know that you can do good and make profits. Doing good and making a profit aren’t mutually exclusive. Timken has been a green business before it became a hip thing to do. Our foundational product — the tapered roller bearing — was invented and found market acceptance precisely because it allowed machines to achieve greater power output with less friction. Less friction means less energy consumed, and our engineers are constantly looking for new ways to attain greater fuel efficiency for our customers. That’s good for business, and it’s good for the environment.
We do a lot of these things because it makes good sense. For example, in 1990, it took me a certain amount of energy to make a ton of steel here in Canton, Ohio. Between 1990 and today, I reduced it by 29 percent. So it takes me 29 percent less energy to produce a ton of steel than it did in 1990. I did that because it makes sense for me to do that.
Make your voice heard with elected officials. At the end of the day, this is our country. It works best when we are all engaged together — business, government and citizens. Our continued engagement is critical because times are tough for many of our neighbors and it is critical to rebuilding the trust we have lost.
Stay educated. This is a constant struggle given the demands of running a business and the speed and volume of information out there. Every day, someone is devising a new law that affects your ability to succeed in the marketplace and keep people employed.
Finally, act. Don’t be afraid to pick up the phone or send an e-mail to make sure your view is known. Understand the issues and be able to clearly articulate the impact of those issues on your organization, so that our elected officials hear that firsthand. The future truly is in our hands.
How to reach: The Timken Co., (330) 438-3000 or www.timken.com