BusinessTN

As the manufacturing sector continues to dwindle, ball and roller components maker NN Inc. may be bucking trends at home by going with the flow overseas.

NN was founded in Erwin in 1980 by former Hoover ball and roller division head Richard D. Ennen, who recruited his management team to start a competing facility in the same Unicoi County town. Ennen named the company NN because “he wanted his name on the door without having his name on the door,” explains current president and CEO, Roderick "Rock" Baty.

Despite stiffening overseas competition, NN continued to find ways to expand, founding a second ball and roller facility in Mountain City in 1996. In doing so, the company took advantage of, and somewhat assuaged, that area's whopping 17% unemployment rate. Today, NN employs 1,747 workers worldwide, 288 of whom work in Tennessee.

To further complement its core products, NN bought Industrial Molding Corp. in Texas, and Delta Rubber Co. in Connecticut, broadening its focus enough to change the publicly traded company's name from NN Ball and Roller to NN Inc.

In the $2.7 billion market for precision balls, rollers and other anti-friction bearing parts, Johnson City-headquartered NN claims about a quarter of the market share. Two Japanese competitors own roughly another 25% each of the market.

Baty says NN has a slight edge over these competitors, reporting revenues of $325 million in 2005 (70% of it from ball and roller component sales), and attributes his homefield advantage to a skilled and loyal workforce.

Like most manufacturers, NN feels the pressure stemming from the end users' demand for less expensive, better quality products. The company established NN Europe comprised of three plants, and most recently, NN Asia--a Chinese facility slated to go online the first quarter of 2006. This allows NN to trim international exporting costs and focus on its third largest customer, Canton, Ohio-based Timken.

The new Chinese plant could help NN cut more deeply into the much sought-after market share of its Far East competition. And, although the company's international efforts still only make up a small percentage of NN's overall revenues, it could provide a nice safety net if business struggles stateside.

Not all manufacturers have the luxury to go global without having to sell out. U.T.-Knoxville economist Matt Murray says good news like plant expansions can create a false sense of comfort. "We're chasing an ever-smaller piece of the economic pie," says Murray, associate director with the university's Center for Business and Economic Research.

NN will keep chasing its slice, while keeping its core strong at home.