Joseph Sienicki, SKF Aeroengine Factory Manager and Gregory Livingston, Factory Business Development Lead, accept Retool WNY mini-grant award from Jamestown BPU Business Development Coordinator Ellen Ditonto. The local plant will use the money to invest in additional equipment and automation tools. For more information about local companies that received mini-grants from the BPU, see Page B1. Submitted photo

SKF USA’s Aeroengine Plant in Falconer is getting some help from the Jamestown BPU’s Retool WNY mini-grant program.

The grant comes at a time when the local plant’s overseas ownership is working to right-size the company and create additional efficiencies to reverse seven consecutive quarters of organic sales losses.

SKF USA’s Aeroengine Plant in Falconer is investing in additional equipment and automation tools to ramp up production of ceramic rolling elements for the electrified aircraft market, part of the emerging clean energy sector. Ceramic rollers and balls are 40 percent lighter than their equivalent steel rolling elements. The lighter-weight components help reduce fuel usage and enable the growth of the electrified aircraft market.

SKF is focused on improving efficiency in the production line by adding a robotic arm to two existing loading and unloading machines. This project will allow for greater efficiency and increased output to meet the rising demand for these lighter-weight rollers.

Reinvesting and right-sizing are still ongoing throughout the entire SKF company. The company recently released its first quarter financial results, with net sales of SEK 23,966,000, a decrease from SEK 24,699,000 in the first quarter of 2024. Organic growth was -3.5%, an improvement over the -7% of organic growth SKF recorded in the first quarter of 2024. Adjusted operating profit was SEK 3,233,000, a decrease from SEk 3,303,000 in the first quarter of 2024. Adjusted operating margins improved by .1% to 13.5%. While operating margins were roughly on track with last year’s figures, net cash flow from operating activities decreased from SEK 1,781,000 in the first quarter of 2024 to SEK 977,000 in the first quarter of 2025.

“And I think these are the key messages I’d like to leave you with today,” said Rickard Gustafson, SKF president and CEO, during a recent conference call with investor analysts. “Yes, we do operate in a continued weak demand. There are tough market conditions and we are navigating in a very volatile geopolitical world. But with that said, though we have seen signs, especially in Europe, of markets bottoming out.”

While Cummins officials withdrew second quarter or full year financial projections, SKF officials say they expect continued volatility and, even if SKF officials have seen signs of markets bottoming out, they plan for another quarter with negative volumes and expect organic sales to weaken somewhat in in the second quarter of 2025 compared to the same period in 2024.

SKF is in the midst of an organizational review to rightsize its organization to better withstand future turbulent markets. There will be staff cuts, including in Europe, that will be presented in conjunction with the 2025 second quarter financial statements. SKF owns the SKF Aeroengine North America plant in Falconer after acquiring MRC Bearings in 1986. The Falconer plant is part of SKF’s aerospace division.

“We deliberately took the decision not to give a number today, but talk about sizable due to the fact that the discussions are ongoing and we need to get our arms around by country,” Gustafson said in response to an analysts’ question. “How much of this can be natural attrition? How much is real redundancy? And we will come back to you with the accurate numbers once we have them, and that is when we present (the second quarter). But I can give you the base, though. We have roughly 13,000 employees classified as staff acrossSKF globally. So that’s the base that when we say from that we are going to have a sizable reduction.”

SKF officials are telling much the same story as Cummins officials after the first quarter of the 2025 fiscal year.

Sales are down, but it’s not because of tariffs. That effect will come later once more is known. But tariffs are a consideration for SKF officials.

“It is a very tricky question. And we don’t really guide for more than the next quarter. So, I’m going to stick there and don’t try to open that up. But we all know it is hard to predict because what happened on Liberation Day a couple of weeks later, they were paused and paused for 90 days. And what will they actually be in the second half of the year? I’m not sure,” said Rickard Gustafson, SKF president and CEO, during a recent conference call with investor analysts. “We also hear now, at least I read in the news that there are discussions both from China and from the US that they talk about maybe relaxing some of the tariffs that are now in force between China and the U.S. Is that for real or it’s just noise? I don’t know.”