The Bearing Industry and ABMA Sten Malmstrom, SKF USA Inc. A Perspective on The Bearing Industry and ABMA Sten Malmstrom, SKF USA Inc. BSA Presentation Ft. Lauderdale, FL April 25, 2004

2003 World Bearing Sales $25 Billion

Global Antifriction Bearing Market Global Market Size: $25 Billion Source: Various Annual Reports and external financial reports.

World Bearing Industry Number of bearings produced per day: 25 - 30 million Amount of steel consumed per day: 10 million pounds Size range - 1/16” (1.5875mm) to 14 ft (4.267m) Price range - 10¢ to $200,000

US Bearing Industry Bearing industry accounts for about 150 plants in the U.S. Employs about 33,000 workers in the U.S. Large international and smaller specialty companies

USA 2003 Shipments Breakdown $5.3 Billion Source: ABMA

USA Bearing Applications Source: ABMA

Shipments for the Industry Source: US Census Bureau CAGR 5.1% Millions of Dollars

Imports of Ball and Roller Bearings Source: US Census Bureau CAGR 6.4% Millions of Dollars

Imports by Selected Countries

Industry Trends Consolidation Alliances Globalization Developing country production Price - competitiveness in the world market Improved steel quality & new materials, i.e. ceramics Increased prices for scrap steel

ABMA US Production v. General Industrial Production

ABMA

ABMA Started in 1917 to help aid bearing production during World War I. Eventually formed the Anti-Friction Bearing Manufacturers Association (AFBMA). In 1993, the organization decided to change to the American Bearing Manufacturers Association (ABMA) to include component manufacturers. Membership Requirements - Manufacture bearings or major components in the US. Component Manufacturers Delta Rubber - Seals Cooper Products - Ceramic Balls As long as a company manufactures in the US their headquarters can be overseas and still be member of ABMA. SKF and FAG are two good examples.

ABMA Members

Role of ABMA Conduct Industry Conferences and Meetings Define National and International Standards Offer Targeted Education Programs Compile Market Statistics Role of ABMA ABMA is focused on maximizing the networking capability of US bearing manufacturing. ABMA has four main roles to the membership.

ABMA Meetings Spring Meeting - Washington DC - Focused on keeping up contacts with government agencies and elected officials. Annual Conference - Theme-oriented and networking opportunity. Past themes have included Supply Chain Management and E-Business. World Bearing Summit (WBS) Meeting - Members of ABMA, Japanese Bearing Industry Association (JBIA) and Federation of European Bearing Manufacturers Association (FEBMA) get together and discuss issues dealing with the global bearing industry. The next WBS meeting is May 10-11 in Washington DC.

ABMA Standards Program ANSI/ABMA Standards ANSI/ABMA/ISO Standards Bearing Technical Committee (BTC) B3 Committee - Accredited Standards Developer Technical Advisory Group (TAG) ISO Secretariat for Bearing Subcommittees ABMA Standards Set Two types of Standards ANSI/ABMA ANSI/ABMA/ISO BTC - Made up of representatives from ABMA member companies specializing in bearing standards. This committee makes recommendations for new standards and revisions of old standards. B3- This is the standards development arm of ABMA accredited though the American National Standards Institute (ANSI) This committee is made of up of ABMA representatives and industry professionals who work with bearings. TAG -Technical Advisory Committee Submits US vote on technical committee (TC4) for bearings. Secretariat in charge of standards development for three bearing subcommittees under TC4 and Secretariat for TC20 /SC15 on airframe bearings under aerospace technical group.

ABMA Education Program Early 1990’s, ABMA discussed the need for continuing education in Bearing Technology. Ted Harris, a former SKF employee and Penn State Professor, worked with ABMA and ad-hoc committee of ABMA members to put together a curriculum. Program began in 1995 with three courses at Penn State. Through 2003, ABMA has offered eleven different courses and expanded to Georgia Tech, Notre Dame and a course at the STLE Annual Meeting. Over 750 managers & engineers have attended the ABMA courses. Program has been extremely successful to fill the void of education on the bearing industry at US Colleges and Universities. Looking toward continued expansion to other universities and topics

2004 Education Program Advanced Concepts of Bearing Technology Seal Technology: Design Principles & Application Essential Concepts of Bearing Technology Application of the New ISO 281 Standard for Bearing Life Prediction Advanced Concepts in Lubrication & Wear This year’s program is endorsed by BSA. BSA members can attend at the ABMA member rate. BSA Annual Convention attendees receive an additional 5% off the ABMA member rate on all remaining 2004 courses.

ABMA Statistics Program Current Reports Quarterly Statistics Quarter Turns R & D / Profitability & Capital Expenditures Bearings Market Survey World Bearing Statistics Quarterly Reports Four times a year Used as a way to supplement government data only done twice a year. Quarter Turns High Level Executive Summary of ABMA quarterly reports Import / Export Commerce Numbers screened for bearings and posted once a month WBS Statistics gathered by ABMA,JBIA and FEBMA. Statistics focused on these regions. Broken down quarterly but reported twice a year. All reports are only for ABMA members that participate in the program

ABMA Today, ABMA has 28 member companies manufacturing approximately 80% of the bearings produced in the US. Similar organizations throughout the world Japanese Bearing Industry Association (JBIA) Federation of European Bearing Manufacturers’ Association (FEBMA) Chinese Bearing Industry Association (CBIA) India, Ball & Roller Bearing Mfrs. Association (IBRBMA)

China Anti-Dumping February 13, 2002 - Petition Filed with ITC March 6, 2003 - The DOC issued affirmative final determination April 14, 2003 - The ITC issued negative final determination May 14, 2003 – ABMA filed an appeal with the Court of International Trade

Questions or Comments

Questions or Comments

Questions or Comments