This industry covers establishments primarily engaged in manufacturing ball and roller bearings (including ball or roller bearing pillow block, flange, takeup cartridge, and hangar units) and parts. Establishments primarily engaged in manufacturing plain bearings are classified in SIC 3568: Mechanical Power Transmission Equipment, Not Elsewhere Classified.
332991 (Ball and Roller Bearing Manufacturing)
The ball and roller bearing industry is very large, but mature. It affects everything from the production of space shuttles to household appliances, automobiles, dentist drills, roller skates, and computer disk drives. In 2001 U.S. establishments involved in ball and roller bearing manufacturing employed a total of more than 32,200.
The issues facing the bearing industry are both numerous and complex. As a secondary steel product manufacturing industry, it is in the middle of the production chain; however, policies favoring the steel industry may not be in the best interest of the bearing industry, and vice versa. Because bearings are essential components of military and civilian machinery and equipment, the federal government has historically been a major customer of the industry. Nonetheless, high labor and production costs have caused the bearing industry to lose business to foreign competitors who have been able to sell bearings of equal quality at lower prices. U.S. bearing companies have also had to contend with illegal dumping practices by foreign competitors. Found guilty of these practices, many perpetrators then turned around and either opened plants in the United States or bought plants to supply their American customers. In the late 1990s and early 2000s, American manufacturers were especially confronted with competition from Asian countries, most notably China.
The ball and roller bearing business is unusual because it is strictly a component manufacturing industry. The industry accommodates its markets by selling loose or packaged bearings; these packaged bearings are installed in races that allow manufacturers to interchange complete bearing components. The industry has continued to evolve by developing new materials and lubricants and searching for alternative uses for bearings. Bearings have been found to have almost limitless applications and are expected to be in demand as long as machines are manufactured.
Ball bearings are spherical in shape, whereas roller bearings are cylindrical and may be tapered on one end or flattened to resemble needles. Generally, a ball bearing is used when speed is important; a roller bearing is used more often when load is most important. The manufacture of antifriction bearings starts from rod or wire. In a typical production process, pieces of wire are cut off in a press, placed between dies, and pressed into the shape of a ball or roller. Large rollers are produced by machining turning processes. The fin of surplus material that forms in the pressing process is removed between rotating file discs, and the diameter of the bearings is reduced through grinding and tumbling processes. Roundness specifications and surface finish improvements are also attained during grinding and tumbling. The bearings are then hardened, tempered, and given a high polish by further tumbling with a polishing agent. Finally, the elements are graded according to diameter.
Ball and roller bearings are used in anything that slides, glides, or rolls and, in some cases, are as large as 15 meters in diameter. Two general classes of bearings exist: commodity and precision. Commodity bearings are used in rotating elements that have relatively low revolutions per minute and do not face extreme stresses. Precision bearings, on the other hand, are highly accurate in terms of material quality, consistency of finish and diameter, and repeatability of tolerance levels. These bearings go through rigorous tests that check internal structure for failure tendencies and measure diameters to within one-millionth of an inch. Because the bearing industry has achieved such high product standards, it is widely respected for its ability to ensure an extraordinarily high level of quality control.
The value of shipments of complete antifriction bearings and components, including balls and rollers, was $5.7 billion in 1997, representing an increase of 5 percent over 1996 shipments of $5.4 billion. The industry's product share is divided into many different categories. In 1997, the industry produced complete ball bearings valued at $2.1 billion; completed tapered roller bearing and roller bearing parts (except rollers) valued at $1.4 billion; mounted bearings (except plain) valued at $426 million; and parts and components of ball and roller bearings valued at $656 million.
The primary materials consumed by the industry include alloy steel mill shapes. Cold steel and iron forgings, however, are also widely used in the bearing industry. Other materials and devices used by the industry include raw and composite ceramics, electric motors, machine cutting tools, grinding wheels, powdered metals, copper wire, stainless steel sheets, carbon steel bars, and iron, steel, and copper scrap.
The delivered cost of materials consumed by kind by the bearing industry in 1997 was as follows: metal bolts, nuts, screws, washers, rivets, and other screw machine products were valued at $18.4 million; balls, rollers, cages, collars, races, and other anti-friction bearing components and parts were valued at $601.5 million; miscellaneous materials, component parts, containers and supplies were valued at $424.8 million; other iron and steel forgings were valued at $239 million; steel bars, bar shapes, and plates (except castings, forgings, and fabricated metal products) were valued at $186.8 million; and all other steel shapes and forms (except castings, forgings, and fabricated metal products) were valued at $182 million.
Traditionally, manufacturers of motor vehicles and their parts and accessories are the largest consumer of U.S. bearing industry output, often accounting for over 15 percent of production. The next four leading sectors for the industry are exports at about 10 percent; ball and roller bearings at about 7 percent; telephone and telegraph communications at about 6 percent; and blast furnaces and steel mills at about 4 percent. The mining, oil drilling, and metalworking industries are also heavy consumers of antifriction bearings. Additionally, bearings of various types and sizes are widely used in refrigeration and heating equipment, motors and generators, aircraft and related parts, and railroad equipment.
Antifriction bearings offer several advantages to machine designers. The friction placed on the bearings due to loads exerted is much lower than for other types of bearings. It is the lack of bearing friction that prevents excessive wear and abrasions on machines that start and stop while loads are applied. Automobile parts are examples of elements that benefit from less friction and wear. Roller bearings, in particular, are easily lubricated, can carry heavy loads relative to their size, and remain accurately aligned over extended periods of use. For these reasons, the huge market for antifriction bearings is stable and nearly recession proof.
Since the invention of the wheel, the theory of bearing movement has been understood as a powerful phenomenon. The transfer of power to a rolling element has allowed societies to develop increasingly sophisticated structures and innovative machinery. As engines became more advanced and technology and production techniques improved, bearing manufacturing itself became a high-precision trade. Because virtually anything that rolls or spins uses bearings, the performance of the moving part is directly related to the bearing component. As such sophisticated machinery as military and commercial aircraft and nuclear-powered submarines have demanded increasingly high levels of precision and performance, bearing technology has evolved as a science and industry of its own.
Beginning in the mid-1980s and continuing through the mid-1990s, American bearing manufacturers were subjected to dumping by foreign bearing manufacturers and various tactics designed to circumvent subsequent anti-dumping regulations. Dumping is a strategy that involves selling products in foreign countries at prices lower than the cost of manufacture in the parent country. The strategy is designed to allow a manufacturer to gain market share in a foreign country by providing a product at a price that is too low for competitors to match. Eventually competitors will be forced out of business, and the foreign competitor can command much higher prices because the competition has died.
Between 1968 and 1986, market share of imported bearings in the United States rose from 30 percent to 64 percent. After experiencing significant market share losses, Timken Company and the Anti-Friction Bearing Manufacturers Association (AFBMA; now known as the American Bearing Manufacturers Association) petitioned the Department of Commerce in 1987 to conduct an investigation of import practices.
The Trade Expansion Act of 1962 makes provisions for such investigations if the industry has been eroded to the point that it cannot compete internationally and if the nation's security is at risk. Because bearings are used in missile guidance systems, aircraft engines, tanks, and machine guns, dependence on foreign suppliers could leave production of this military equipment vulnerable. Moreover, because U.S. equipment manufacturers do not have control over the production schedules of foreign companies they could be limited in their response to a surge in production demands during a military emergency.
Timken and the AFBMA eventually prevailed and the Department of Commerce instructed U.S. Customs to collect duties on shipments of bearings and related parts from Great Britain, Sweden, Italy, France, West Germany, Japan, Romania, Singapore, and Thailand. The Defense Department supported domestic manufacturers by issuing a "buy-American" policy for all antifriction bearing purchases.
These actions resulted in a rise in bearing prices and bearing purchasers soon became incensed. Although the decision to impose duties only affected imported anti-friction bearings, distributors took this as an opportunity to implement across-the-board increases. By 1989, a coalition of original equipment manufacturers called the American Manufacturers for Trade in Bearings (AMTB) took a stand against the duties on imported bearings. The AMTB represented manufacturers that collectively purchased over 200 million products annually. This amounted to twothirds the consumption of commodity ball bearings and double the amount produced by U.S. bearing manufacturers. The AMTB claimed that domestic bearing manufacturers had been unable to meet U.S. demand for commodity ball bearings since the early 1980s and argued that the imports made up for this shortfall.
The specific bearings the AMTB was fighting for were commodity ball bearings, which have specific applications. The five most popular models in this line collectively account for more than 50 percent of the commodity bearings sold in the United States. Their primary applications are in power tools, appliances, automobiles, office equipment, and computer components. According to the director of commodities purchasing at Black & Decker, an AMTB member, only three companies in the United States were capable of producing commodity ball bearings at the time of this decision.
The legal battle between foreign and domestic bearing manufacturers continued into the 1990s. In 1990 Ingersoll-Rand, then America's leading bearing manufacturer, prevailed in convincing the U.S. International Trade Commission to raise duties on ball bearings from nine foreign nations that were selling bearings in the United States for sometimes as little as one-third of their home market price. In 1994 the Japanese bearing manufacturer NTN Corp. announced that bearing production at its U.S. subsidiary, NTN Bauer, would increase by 150 percent. Simultaneously, 50 percent of production at its Okayama factory would be shifted to its facilities in Alabama and Illinois. Production was shifted to the United States to counter dumping allegations aimed at NTN exports, which already had a dumping tariff levied against them. In the early 1990s, the United States began to more broadly define "cylindrical roller bearings," which were dutiable. Subsequently, in 1995, Nippon Thompson Co., Ltd. began shipping a new needle roller bearing to the United States that was specifically designed to circumvent U.S. anti-dumping duties. Needle roller bearings, which previously fell outside the boundaries of dutiable goods, were now included in the new broader classification. NTN's new bearing was specifically designed to challenge this reclassification.
In 1997 there were 184 establishments in the U.S. ball and roller bearing industry. It was predicted that this figure would increase to 197 by 2000. These establishments manufacture a diverse product line of ball bearings, roller bearings, mounted bearings and various related parts. Although there are a number of small- and medium-size establishments, the industry trend has been toward consolidation via mergers and acquisitions. Of these establishments, 89 had 100 or more employees, 40 had between 20 and 99, and 55 had 19 or fewer employees. The states with the largest number of industry establishments are Connecticut, New York, Pennsylvania, South Carolina, and Ohio. New plants have been built mostly in the South so as to take advantage of lower labor costs. Older plants have either been refurbished or their production capacity has been increased.
Because bearings are vital components of machinery, the industry is relatively recession proof. World ball and roller bearing production is estimated to be around $25 billion. According to the U.S. Department of Commerce, in 1995 the value of U.S. industry shipments was $5.2 billion before experiencing a slight decline in 1996.
Falling prices countered steady sales in the late 1990s. "The cost increase in material, consumables, and wages can only be partially offset by productivity changes and or design changes. A modest increase in aftermarket prices for select product groups is possible in 1999. However, original equipment prices have been flat," according to David Gridley, executive director, marketing services at the Torrington Company. Laura Grondin, vice president and general manager for Hartford Bearing concurs, "Prices will either stay the same or fall by 2 to 3 percent. The industry is still extremely competitive, and it will get worse." Much of this pessimism is due to overcapacity and softening demand. "There is overcapacity domestically," Grondin concluded.
According to Gridley, demand softened in the agricultural equipment, steel, paper, oil field, and aircraft sectors. In the automotive industry, however, demand for bearings for both light and heavy trucks rose significantly, according to the U.S. Department of Commerce.
Shipments of ball and roller bearing grew steadily during the 1990s, peaking in 1998 with more than $5.8 billion. Although 1999 and 2000 remained relatively strong, value of shipments dropped dramatically in 2001, sinking to $5.3 billion, the lowest since 1995. Reasons included the economic recession, decreased automotive demand, and the events of September 11, 2001. There was moderate growth in the sector in 2002, with the automotive market leading bearings growth. Analysts predicted a more widespread recovery for the industry in 2003, in the 2-3 percent range, largely resembling 2002. With automotive production rising 5 percent in 2002 due to sales incentives including zero percent financing, the benefit to the bearings industry may soon wane as automotive demand began to decrease again in late 2002 and early 2003. Flat demand was expected for the automotive industry in 2003.
Bearings worldwide were doing significantly better. Orders were increasing globally and were forecast to grow 6.5 percent per year through 2005 to $42 billion. With supply levels remaining high worldwide, bearing prices overall were stable and not expected to rise in 2003. Conversely, prices for imports were expected to increase in 2003. As bearings from China came into the United States, selling at below market values, the federal government has levied anti-dumping duties of up to 59.3 percent. Lead times for all bearings continued to fall 10 to 20 percent with 60 percent of buyers receiving product within a week, according to one survey. Average lead time was about 2.6 weeks, down 19 percent from one year ago.
Consolidation remained an important trend in the bearings industry. In 2002, industry leader The Timken Company acquired Ingersoll-Rand's subsidiary Torrington, the leader in the bearing market, pending federal government approval. Another major deal affecting the industry that year was Danaher Corp.'s acquisition of Thomson Industries.
Already a leader in the industry, Timken became the undisputed heavyweight of U.S. ball bearings with the 2002 acquisition of industry leading Ingersoll-Rand's The Torrington Co. Timken has been perfecting its tapered roller bearings since 1898, and, by the early 1990s, the company offered 26,000 different bearing combinations. Promoting itself as the world's largest tapered roller bearing producer, Timken attributes part of this success to international trade. After establishing a sales office in Japan in 1974 in an effort to serve Asian distributors, Timken finally made inroads with Japanese automobile manufacturers in 1987. The currency exchange rate and political climates contributed to the company's success in 1987, but the company received an important image boost, primarily by maintaining a good reputation for quality when other U.S. goods were perceived as being inferior to Japanese products.
Although price competitiveness was not possible, technical expertise from Timken's side won praise from Japanese design engineers who started specifying tapered roller bearings for their products. With patience and expertise, Timken started supplying Nissan Motor Company and Mazda Motor Corporation with wheel bearings. Generally about 20 percent of Timken's sales comes from the export market and bearings represent about twothirds of Timken's total sales. In 2002 Timken had sales of more than $2.55 billion, up from 4 percent from 2001. Timken has operations in 25 countries and employs nearly 18,000. Its subsidiary, MPB Corp., manufactures precision bearings for various specialty markets.
In late 1999, Timken announced a reorganization focusing on four basic industries rather than geographic areas. "This reorganization is designed to cut across geographic boundaries. It will allow us to work more like our customers do," said Elaine Reolfi, Timken's manager of corporate and marketing communications. The new business lines are automotive, industrial, aerospace, and rail. "This is a more efficient and logical organization for the company that will help facilitate additional growth," according to Reolfi.
Sweden-based Aktiebolegat SKF (also know as SKF), which was incorporated in 1907, is one of the world's leading roller bearing companies. Headquartered in Norristown, Pennsylvania, SKF USA is the American subsidiary of SKF that employs 5,000. In 1988, SKF controlled 20 percent of the world market in bearings, which was more than twice the market share held by its closest competitors. In 2002 sales were $4.8 billion, up 18.2 percent from 2001, and the company employed 39,739 people.
SKF's entrance into the bearings market was motivated by its frustration with the poor quality and high cost of other bearings. The parent company, Gamlestadens Fabriker, a textile manufacturer, granted funds for research into producing bearings. Subsequently, the founder of SKF, Sven Wingquist, went on to develop the double row, self-aligning ball bearing that introduced SKF as a leader and innovator in the industry. From the onset, SKF aligned itself with the automotive industry and pushed its operations into France and the United Kingdom to compete directly with German manufacturers. In 1909 SKF established a New York subsidiary, which acted as a sales office for products manufactured in Sweden. In 1916 the SKF Administrative Company was formed in New York, and in 1918 a manufacturing plant was established in Hartford, Connecticut. SKF quickly acquired two other manufacturing plants in Philadelphia. Also in 1916, the company acquired another Swedish ball bearing producer as well as a steel works company to increase its steel supply for bearings. During the 1920s, SKF furthered its reputation for innovation when it introduced spherical and taper roller bearings.
NSK Ltd., of Tokyo Japan, is another world leader in the bearings market. Bearings used by the automotive, information technology, and electronics industry accounted for about 60 percent of the company's sales. The company also supplies automotive components, including automatic transmission parts, steering columns, and precision machinery including linear guides and ball screws. NSK has approximately 50 subsidiaries in countries worldwide and employed 22,337 people as of 2002. That year, total sales for the company were more than $3.62 billion.
In 2001 the U.S. ball and roller bearing industry employed 32,222 with a total payroll of more than $1.33 billion. Of total employees, 26,290 were classified as production workers with average hourly wages estimated to be $18.50.
The technical side of the bearings industry offers employment for such job classifications as engineers and metallurgists, as well as skilled and semi-skilled workers. The U.S. Bureau of Labor Statistics generally predicts that employment opportunities for mechanical engineers will grow about as fast as the average for all occupations. The outlook for metallurgists is slightly pessimistic, with a forecast for employment opportunities to increase more slowly than the average for all occupations. Because relatively few students choose to go into metallurgy, however, all graduates are expected to be able to find employment. The outlook for skilled and semi-skilled workers in such occupational classifications as assemblers, inspectors, machine tool cutting operators, welders, and the like is generally expected to decline through 2006. Much of the decline in these occupational classifications is due to increased automation.
The largest bearing producing countries are the United States, Japan, and Germany. These three countries also represent the three largest markets for bearings in spite of growing demand in other European and Asian countries. U.S. bearing manufacturers increased their exports by 9 percent in 1997; Canada was the primary market, accounting for 45 percent of U.S. bearing exports worth $449 million. Canada was followed by Mexico, which took in 12 percent of industry exports valued at $123 million. The other three major importing countries were Germany (4.6 percent, $46 million), the United Kingdom (4.3 percent, $42 million), and Japan (3.6 percent, $36 million.)
The Asian economic crisis of 1997 and 1998 was still influencing the U.S. bearing industry at the end of the decade. The crisis resulted in a rise of low-priced imports that in turn created more competition and pressure for domestic manufacturers according to David Gridley of The Torrington Company. "Capacity utilization is at 90 percent and falling. Many segments, such as standard radial ball bearings, have unused capacity due to rising low priced imports and falling industrial demand in North America and worldwide due to the Asian crisis. …Thegeneral economy for bearings has weakened in the last six months," Gridley said in early 1999.
In order to meet demand in developing countries it is expected that the world's major bearing manufacturers will build facilities in these regions to take advantage of cheap labor and lower production costs. Advantages in labor costs are, however, somewhat offset by a shortage of skilled workers.
Bearings demand was expected to grow by an average of 2 percent per year through 2010 in the U.S.; 5.6 percent per year in Western Europe; 6.8 percent per year in Asia/Pacific region; and 9.9 percent per year in Canada and Mexico.
The production of ball and roller bearings is a mature industry and the basic technology for it has been in place for decades. Technological innovations in the industry in the late 1990s focused on the use of new and sometimes exotic materials, more efficient bearings, and bearings specifically designed for more narrow market applications.
Traditionally, steel was the major component of ball bearings because of its strength and existing technology for its production and machining. By the late 1990s, however, many bearing manufacturers were looking toward the use of other materials for their bearings. The use of exotic materials in bearings, often called hybrid bearings, was becoming more and more the norm. Hybrid bearings using such materials as silicon nitride ceramics were being produced and tested for improved performance. Wausau Paper Mills estimated savings of $40,000 per year by using self-lubricating graphite alloy bearings in their stock tank agitators. These agitators have a propensity to destroy bearing lubricants and Wausau found that the original equipment bronze bushings would frequently fail between the recommended six-month preventative maintenance inspections. The graphite alloy bearings have lasted 12 to 24 months of service without showing wear.
Silicon nitride ceramic hybrid bearings and even all ceramic self-lubricating bearings are finding increasing applications in the semiconductor industry. Sulfuric acid and other corrosives, which are used to etch silicon wafers, also have a corrosive effect on steel roller bearings. The traditional lubricants used with steel bearings also tend to become gaseous in vacuum systems, thus contaminating the ultra-clean environment required by the semiconductor industry. The answer is silicon nitride hybrid bearings. The industry is also awaiting development of all ceramic bearings.
The EGC Corp. has developed a new material for high-load bushing and bearing applications called XC-2L. The polyetheretherketone (PEEK) carbon-fiber reinforced material incorporates a lubricant compound, making it ideal for applications where more common materials cannot be used because of media incompatibility, dry running, high PV, high temperature requirements, or contact with abrasive mediums. In comparative testing XC-2L outperformed traditional materials such as steel and bronze.
Duralon composite bearings are being produced by the Rexnord Corp. for special applications, especially in the textile industry. The bearings are made of a self-lubricating, low friction composite, consisting of a Teflon/Dacron fabric liner bonded to a supporting shell of filament-wound, high strength fiber glass and epoxy resin. These bearings have a low friction coefficient and require no lubrication. Because they need no lubrication, there is no danger of them "running dry," and they are thus well suited for machinery locations where accessibility is difficult. The absence of grease or oil lubricants also makes them ideal for the textile industry because there is no danger of lubricant stains on fibers or fabrics. They also do not suffer from fretting corrosion or brinelling that is common in other bearings because of the high cyclic rate of mechanisms used in weaving machinery.
Aiming at industries concerned with machine tool precision, accuracy, and part-surface quality NSK of Ann Arbor has introduced their Ultra bearing. This new bearing combines high-speed capability with low internal heat generation. The low heat generation is attributed to design features of the bearing and a lightweight phenolic cage. Also aiming at a particular market niche, Torrington is developing camshaft supports that use needle instead of slide bearings. The use of needle bearings for this application is expected to lower friction, boost fuel economy, and eliminate valve train durability concerns.
In 2002, SKF USA Inc. developed a hybrid bearing which had the potential to help refrigeration and airconditioning compressor designers with a long-time bearing problem. Generally, oil is mixed with the refrigerant to keep the bearings lubricated in a compressor. Problems arise when the resulting oil/refrigerant mixture enters the bearing where the refrigerant usually evaporates and prevents the oil from lubricating the balls and raceway. The long-time fix has been to minimize the degree of mixing by using an oil separator, which collects the oil and moves it back to the bearings. The separator, however, increases parts and cost to the compressor, along with increased maintenance issues. The New Hybrid bearing, made up of steel raceways and silicon-nitride balls, has with the ability to use the refrigerant as the lubricant, utterly erasing the need for oil. They are also expected to last longer and accommodate higher speeds than all-steel bearings.
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