By Mike Boyer
The Cincinnati Enquirer

Coming off its worst recession since the 1930s, U.S. manufacturers are now facing the uncertainty of possible war with Iraq, says Ronald Brown, Milacron Inc. chairman and CEO.

"My biggest concern in the short term is a war with Iraq," he said during a presentation Wednesday to the Association for Corporate Growth.

Uncertainty over the impending war "is having a severe impact on all markets, including capital spending."

Many companies aren't investing in new capital equipment until they see what's going to happen, he said.

But longer term, he told the group of business and development professionals, Milacron's goal is to return the century-old Cincinnati company to revenues of more than $1 billion by 2005, up from $693 million last year, while increasing operating profit margins to 12 percent from their current break-even level.

In the just completed fourth-quarter, Brown said Milacron managed to generate positive operating earnings excluding interest expenses after recording a loss on operations a year ago, despite basically flat revenues.

"That's the right direction, but we still have a lot to do," he said.

In the last several years, Milacron, once known as a machine tool company, has reshaped itself.

It shed the machine tool business in 1998 to focus on the faster-growing business of servicing and supplying plastic-making machinery and water-based and synthetic industrial fluids.

Unwinding a decade of acquisitions in the 1990s, Milacron's revenues have shrunk from $1.5 billion just a few years ago.

Faced with the continuing manufacturing slump last year, the company decided to leave its metal-cutting tools businesses, generating $300 million to reduce debt.

Milacron has also begun implementing lean manufacturing and Six Sigma programs to further reduce costs and improve efficiency.

Brown said one of Milacron's key challenges is changing its culture from viewing itself solely as a manufacturer to being a supplier of equipment and services.

"We don't have to do it all ourselves," he said, noting it might be cheaper to buy some products from lower-cost countries.

E-mail mboyer@enquirer.com