The Good Times Are Back for Some Manufacturers

On his frequent trips to Shanghai, Timken Chief Executive Officer James W. Griffith sees cars on freeways and cranes at construction sites powered in part by the steel bearings his company has made for 111 years. “Tepid economic growth and unemployment dominate the headlines in the U.S., but there are opportunities for our products in developing countries,” he says. “In China, even in a bad year, the economy will grow 6 percent to 8 percent.”

Factory production at many U.S. manufacturers is slowing, but not at Canton (Ohio)-based Timken or at Parker Hannifin, a Cleveland hydraulics concern, or at Kennametal, a Latrobe (Pa.) maker of cutting tools and machinery components. These midsized, Midwest companies have figured out how to thrive in an economic environment that has been a lot less kind to many other companies that make things. They posted three of the top four profit increases among 32 U.S. industrial companies in the two years ended June 30, beating out Deere, Caterpillar, and Navistar, which ranked sixth, seventh, and 16th, according to data compiled by Bloomberg.