In early 2002, IR decided to divest the Engineered Solutions segment (Torrington).
Strategically, that decision appeared to be consistent with the company’s desire to allocate
capital to higher potential growth and higher return service businesses, where IR could leverage
its cross-selling strategy. IR could not justify allocating substantial capital resources to maintain
a leading competitive position in a consolidating, relatively slow-growth industry. Moreover,
from an end-market standpoint, the divestiture would reduce IR’s exposure to the North
American automotive markets.
In 2002, IR reported a loss of $173.5 million on sales of $8.9 billion (Exhibit 3) and
assets of $10.8 billion (Exhibit 4).