The Timken Company: Market Entry Into Romania (B)

On November 17, 1997, Jon T. Elsasser, then vice president of The Timken Company’s Bearings business for Europe, Africa and West Asia, reviewed the company’s proposal to the Romanian government for the acquisition of Rulmenti Grei, S.A., an industrial bearings plant being privatized through the Romanian State Ownership Fund. Elsasser reflected on the significance of the acquisition and its potential impact on Timken’s global bearings business. While Rulmenti Grei offered needed production capacity and an improved cost structure, Timken remained wary of Romania’s political instability and the numerous operational challenges of integrating the plant into Timken’s global organization. Importantly, the investment also represented a marked shift in corporate culture and objectives. While Rulmenti Grei produced a variety of bearings types, Timken remained focused on tapered roller bearings, driven by corporate history and pride as a specialist manufacturer. However, European customer demand required that Timken consider expanding its product offering. Thus, Rulmenti Grei represented much more than needed production capacity; it had the potential to drive change in a century-old corporate culture See also IB39A