ABMA Update

Group President, The Timken Company and ABMA Treasurer

Chris Coughlin

Who Is ABMA • ABMA began in 1917 as an

informal committee to aid production of bearings during World War I.

• The committee consisted of

Andrew Company, New Departure, Nice, Federal, Fafnir, SKF, Norma, BCA, Marlin Rockwell and Atlas Ball.

• In 1933, articles of

association were established to create the anti-friction bearing manufacturers association (ABMA).

Who Is ABMA ABMA’s mission is to provide leadership, advocacy and education with a focus on membership value, industry outreach and issues impacting the global bearing industry.

ABMA’s vision is to be the premier national association and voice of the American bearing industry.

ABMA Member Strong Primary Member Companies Abbott Ball Company Accurate Bushing Company, INC American Roller Bearing Atlantic Bearing Services Baldor Dodge Bearings Manufacturing Company Coorstek Inc Hoover Precision Products Koyo Corporation Nachi Technology Nakanishi Manufacturing New England Miniature Ball New Hampshire Ball Bearings NN, Inc. NSK Corporation

NTN Bearing Corporation of America Regal Rexnord Schaeffler Group USA SKF USA, Inc. Standard Locknut LLC The Timken Company Universal Bearings LLC Associate Members Ajax Rolled Ring & Machine Aubert & Duval Greer Steel Latrobe Specialty Metals, A Carpenter Company

Ovako North America, Inc PARTsolutions REM Surface Engineering Rotor Clip Company Sentient Science Specialty Ring Products, Inc. Specialty Steel Treating Sullivan Steel Service TATA STEEL Universal Stainless and Alloy Products,Inc. Worthington Industries

ABMA Member Services • Industry Statistics and Trends • Education & Training • Anti-Counterfeiting • Founding Member World Bearing

Association • Standards Development, Networking and

supplier engagement

Industry Statistics

32.5 48

72

105

145

2002 2007 2012 2017 2022 (billion dollars)

Total World Bearing Demand (billion dollars)

Source: The Freedonia Group, Inc.

World Demand by Region (billion dollars)

2002 2007 2012 2017 2022

United States Western Europe China Japan Other Asia/Pacific Rest of World

Source: The Freedonia Group, Inc.

US Bearing Demand by Product (million dollars)

0

1000

2000

3000

4000

5000

6000

7000

2007 2012 2017 2022

Ball Roller Plain Mounted Parts Source: The Freedonia Group, Inc.

Bearing Demand by Market Segment (billion dollars)

0

2000

4000

6000

8000

10000

12000

14000

2002 2007 2012 2017 2022

Original Equipment Manufacturing Maintenance/Repair/Operations

Source: The Freedonia Group, Inc.

OEM BEARING DEMAND BY MARKET & TYPE (million dollars)

0

2000

4000

6000

8000

10000

12000

14000 2012 2017 2022

Source: The Freedonia Group, Inc.

Bearing Imports (Selected Countries)

Source: ABMA Quarter Report.

Bearing Exports (Selected Countries)

Source: ABMA Quarter Report.

BEARING INDUSTRY TRENDS

• Market gains will be supported by improved conditions throughout the US economy.

• Motor vehicle manufacturing, which is the largest bearing-using market, will continue to recover from the decline in output in 2008 and 2009, with production expected to increase 3.0 percent per year through 2017.

• Bearing shipments from US plants are forecast to increase 4.3 percent annually to $12 billion in 2017.

• A number of firms, both foreign and domestic, have expanded their US bearing production capacity in recent years as they prepare to meet growing domestic demand levels.

• US bearing manufacturers’ ongoing efforts to improve the quality and performance of their products will also help spur output growth.

• Roller bearing demand is expected to continue to outpace other product types through 2017, supported by a recovery in the US motor vehicle market, accelerating machinery shipments, and increased sales of large, high-value roller bearings used in heavy machinery and wind turbines.

Source: The Freedonia Group, Inc.

BEARING INDUSTRY TRENDS

• Ball bearing consumption will also post healthy gains, supported by increased manufacturing output, although value gains in this product category will continue to be held back by intense competition from low-cost foreign suppliers.

• Plain bearing demand growth will approximate that expected in the overall bearing market as conditions in the automotive and aerospace industries improve.

• Through 2017, OEM bearing sales will outpace those forecast in the MRO market.

• The large motor vehicle bearing market will post robust gains during this timeframe, bolstered by recovering vehicle production levels.

• Advances are expected to be solid in all major bearing markets, with engines, turbines, and power transmission equipment posting the fastest gains through 2017, supported by sales of wind turbine bearings. Source: The Freedonia Group, Inc.

Education & Training

2015 Webinar Series FATIGUE LIFE Date: Wednesday, March 18th Recording Available Moderated and presented by Bimal Nathwani, Engineering Manager and presented by Dave Sirrine, Manager of Application Engineering, both of the NSK Corporation EFFECT OF GEOMETRY ON ROLLER BEARINGS Date: Tuesday, April 14th Time: 1:00 – 2:00pm EST Moderated by Jim Misch, Director of Industrial Engineering, and presented by Rick Janssen, Staff Engineer both of the NTN Bearing Corporation

BEARING ADJUSTMENT Date: Thursday, May 14th Time: 1:00 – 2:00pm EST Moderated by John M. Byers, Technical Development Manager, and presented by Michael D. Allega, Specialist Application Engineer, and Jesse Yorty, Principal Application Engineer all of the Timken Corporation Upcoming Webinars BEARING STEELS- September EFFECT OF GEOMETRY ON BALL BEARINGS- October GREASE- November

2015 Continuing Education LUBRICATION AND WEAR: ADVANCED CONCEPTS May 12 - 14, 2015 Notre Dame Conference Center South Bend, IN ADVANCED CONCEPTS OF BEARING TECHNOLOGY June 8 - 11, 2015 Ann Arbor Marriott at Eagle Crest Ypsilanti, MI ESSENTIAL CONCEPTS OF BEARING TECHNOLOGY October 27 - 29, 2015 Ann Arbor Marriott at Eagle Crest Ypsilanti, MI

Anti-Counterfeiting

Counterfeits – The Facts Single most important issue facing our industry

Counterfeits are in all shapes and sizes

Complex network of criminals

Criminals understand the rules and how to get around them Between 2009 and 2014, Chinese Customs seized over $7 million counterfeit bearing products at their borders en route to 50 different countries including the U.S.

Anti-Counterfeiting Examples

STEEL INDUSTRY

Bearings failed at a steel rolling mill in the U.S. -Chicago area.

Although they showed a well known trademark, the parts were counterfeit and missing functional features that directly led to the failure

Anti-Counterfeiting Examples MINING INDUSTRY

Bearings were seized in Miami just prior to being shipped to a mining operation in Brazil.

Of poor quality, at over 1 m (3.2 feet) diameter and over 2500 lbs, they represented a significant safety hazard and financial risk if installed in key equipment.

Anti-Counterfeiting Examples

Non-industrial uses

NSK was contacted by the RCMP about this bearing and packaging. Much discussion ensued regarding this unknown complex bearing structure using an old NSK trademark- was it a roller clutch with a tapered roller bearing on the end? The bearing in the photo was a hollow shell filled with cocaine.

Anti-Counterfeiting Examples

Rail Industry: A great example of how US Customs helped prevent a Passenger train safety issue. Customer now assured of purchasing genuine and warranted product.

Counterfeit Marking Shop

Bearing

Producer

Counterfeit Marking Shop

Counterfeit Marking Shop

Counterfeit Marking Shop

Working with Law Enforcement We have had successful counterfeit raids in: U.S., Mexico, Panama, Canada, Chile, Peru, and Brazil. We are currently investigating potential counterfeit goods/distribution in: USA, Panama, Canada, Columbia, Brazil, and Chile. ABMA members are contracting with National Cyber-Forensics and Training Alliance (NCFTA) to locate and identify involved parties, enhance security best practices and procedures, and effectively “neutralize” through pro-active law enforcement.

NCFTA report button can be added to manufacturers websites to help with reporting suspect product. Button does link direct to HIS (ICE) reporting database.

Global Approach Working with the WBA

Photo Qingdao Customs

Global Approach Chinese Program • Focus Regions – Shandong,

Shanghai, Ningbo and Qingdao (Xiamen in 2014)

• Continuous raids of counterfeit manufacturers and supply chain

• Customs seminars and • government engagement • (state & local levels)

India Program Mumbai and New Delhi raids Mumbai Customs Engagement

Latin America Program Brazil program initial stages Chile and Columbia initial stages

BSA and ABMA Working Together • Detection is Getting Harder • Manufacturers protect you from counterfeit

importation • Genuine, trademarked products • In return, distributors know they’re using official

products • Authentication is becoming more challenging • Each brand has unique overt/covert features • Brand owners have designated experts assigned to

authentication • Not sure – always contact the manufacturer or

ABMA for assistance

Red Flags Counterfeit Supply Chains source countries, mostly China –Hong Kong– Eastern Europe (Russia and Poland) Trans-shipment through US to Latin America Manufacturer’s country does not match shipment country Shipment mix of bearings from more than one company and product

Shipping Routes Mostly produced and shipped from China and India Usually transferred via a free port such as Hong Kong or Dubai Many ship through multiple countries to avoid detection Some will ship through safe countries like US and Singapore

Examine the Product

Quick glance, they appear identical! Differences can be difficult to detect No effective methods available to identify by appearance alone

Raising Global Awareness Campaign Website

Website Promotional Tools

http://stopfakebearings.com/

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