Since when does a California state agency think it can run Canton’s most successful business?
The Timken Co. is our gem. Looks like we’re in a fight to keep it that way.
The company’s outstanding products, management and survival in recessions is attracting attention. On Nov. 9, TRC Capital proposed a tender offer for Timken shares. Their price was 4.2 percent BELOW Timken’s market price that day. Do they think we’re crazy?
A few weeks later, even crazier hit. Calpers, the California state agency running the public-school teachers’ pension fund, wants their own people on the Timken board of directors. They would split the company into two independent entities — steel and bearings.
How did these bureaucrats suddenly get so business savvy? Timken rejected a similar scheme years ago.
Calpers would be better off solving the local problems it creates. Its pension operations are underfunded by hundreds of billions of dollars. How competent is that?
They came with all manner of factoids on how Timken is “ignored by investors.” They apparently don’t know that the company is one tough operator, in fact, built a huge mill at Faircrest in the middle of a severe recession. That’s not gone without investor notice.
The bearing side has survived the deep swings of the auto industry by revamping how bearings work and developing new markets for them.
TKR is ignored? The stock is up 17 percent this year. Its trading range is $15 higher than just a few years ago.
Calpers comes from a different culture. California regulates everything purchased, eaten, educated and walked on a leash. No other state does this. It’s ruining that once glorious place.
This can only happen when government is in a power vacuum. Major legislation is determined by propositions submitted by special-interest groups.
California has the highest paid public workers in the country and tax increases that never keep up to their demands. The state income tax alone is 8 to 13.5 percent in the most populous income categories. In Ohio, it’s 3 to 5 percent.
California’s state deficit is soaring to $16 billion, up from $9.2 billion in January. State deficits are illegal in Ohio. Then again, our governor is not nicknamed “Moonbean.”
Result: California’s unemployment rate is double digit. Our local rate is almost half that. That state is still in deep recession. We are in recovery mode.
Economists are predicting California will be the first state to go bankrupt.
All this convinces a frugal Midwesterner that Calpers will save a business that isn’t even in trouble. Is that what they think?
There might be some good out of this. Regulations and taxation are killing business in California, including the movie industry. Fine. Perhaps the Timken story will help attract them to Ohio.
Let’s see: Bikini beaches, balmy breezes, 10.2 percent unemployed, dysfunctional government. California certainly earns its new title: America’s Greece (with apologies to Greece).