By Peter Strozniak Timken Co. President and CEO James W. Griffith says the company will close two plants, sell another, and lay off 1,500 of its 20,500 employees in a corporate wide strategy to improve manufacturing productivity. "This is not a reduction in capacity," Griffith says. "This is learning to be leaner, be more productive, generate the same amount of sales with fewer assets, and be more efficient about it at the same time." Griffith says this transformation in its worldwide manufacturing operations will reduce plant-floor space by more than 1 million sq ft while maintaining its current capacity, and cut inventory by more than $25 million. Timken also plans to develop focused factories for each product line and implement Six Sigma lean manufacturing practices. "While we had a couple of good sales years in a row, we have not met earnings target," says Griffith. "This is specifically targeted to improving the earnings capabilities of the company." Timken anticipates the restructuring will save the company about $50 million annually by fourth quarter of 2002. The company expects to make a public announcement about which plants will be closed and which factory will be sold in about two weeks.