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Financial Information:
Annual Report 2002
Review
of Operations
Europe |
| Overview |
NSK's European business began over a quarter of a
century ago with the start of operations at the Peterlee
Plant in the U.K. in 1976. Our network currently includes
manufacturing facilities in the U.K., Germany, Italy,
Switzerland and Poland with R&D and technical
support centers in the U.K. and Poland. We effectively
respond to customer needs through a pan-European market-oriented
sales organization. NSK Europe Limited, our European
headquarters, coordinates operations at our production,
technology and sales offices in the region.
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| Markets
and Performance |
The European economy, which showed signs of recovery
in 2000, started to slowdown in the first quarter
of 2001. This trend accelerated with the September
11 terrorist attacks in the U.S.
Although sales of automotive components, such
as automotive bearings and EPS, increased, those of
bearings for general industrial use and precision
machinery and parts decreased. A lower production
level at our Iskra Plant in Poland and deterioration
of profitability of our steering column business,
as well as a temporary increase in selling, general
and administrative expenses accompanying our business
restructuring, resulted in decreased profitability.
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| Immediate Challenges |
Our goal is to strengthen the cost competitiveness
of our European business through the implementation
of the 2nd Phase of our "Business Restructuring
Program." In the bearing business, we will accelerate
production transfer of standard ball bearings from
the U.K. to Poland, and withdraw from unprofitable
businesses to focus on core businesses such as our
automotive bearing, standard ball bearing, and precision
bearing businesses. In the automotive components business,
we will concentrate on EPS and will consider raising
prices or withdrawing from certain business projects.
We will also reduce the number of production bases
in the U.K. from the current three to one to improve
profitability. Administrative divisions will be streamlined,
including scaling down the European headquarters.
In addition, we will focus on quickly stabilizing
operations of the NSK European Distribution Centre
B.V., our central European warehouse established in
the Netherlands.
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| Strategy |
We will focus on the implementation of the 2nd Phase of
our "Business Restructuring Program" and expand
sales of core products. In standard ball bearings, we
are expanding the global sales of products manufactured
at our Iskra Plant in Poland. In automotive ball bearings,
we are receiving increased orders from German and French
automakers, as well as Japanese automakers. We will try
to increase even further our market share by taking advantage
of our technological expertise. In automotive roller bearings,
we will reinforce our marketing activities in cooperation
with The Timken Company and The Torrington Company of
the U.S., our alliance partners. Also, as a top manufacturer
of EPS, we will meet expanding demand resulting from the
rapid increase in EPS-mounted vehicles. |
| Sales by Production
Region |
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