Kimberly-Clark Strikes Wisconsin Deal, Will Close Plant in Conway

Kimberly-Clark Corp. announced Thursday that it will close its plant in Conway, affecting at least 350 jobs, as it reaches an incentives agreement with Wisconsin Gov. Scott Walker to keep one of its plants open there.

Walker, a Republican who leaves office next month, announced a $28 million incentive package with company executives this afternoon at the paper products giant's Cold Spring plant in Fox Crossing, Wisconsin, which employs about 400 people.

According to Walker's official announcement, the state will pay $28 million to Kimberly-Clark over five years. In return, the company will keep the Cold Spring plant open and invest up to $200 million in it over the next five years. 

Employees in Conway were notified Thursday morning of the closure, which will happen in phases over about 24 months.

Kimberly-Clark officials told the Conway Chamber of Commerce in July that the company was considering closing the Conway plant, which has operated for more than 50 years. State and local economic development officials had been working with Kimberly-Clark to try to keep the plant open but admitted they were outgunned by proposed Wisconsin incentives that at one point reached $100 million.

Brandi Hinkle, a spokeswoman for the Arkansas Economic Development Commission, told Arkansas Business on Thursday that AEDC was disappointed by the company's decision.

"We have put together a very aggressive package with the local folks as well — you know, city of Conway and their chamber of commerce," Hinkle said. "But we had to be careful and always consider what the return would be, and we were just not willing — or able — to do something that wasn't beneficial to the state."

Jamie Gates, executive vice president of the Conway Chamber, said "every incentive was on the table" as they dealt with the company. But he indicated the decision came down to other factors.

"We've got a history of facilitating growth and expansion here using incentives. I don't think that was ever the issue in Arkansas," Gates said. "I think this decision is part of a global and strategic initiative that did not go Arkansas' way. This wasn't a case of Arkansas and Wisconsin both vying for the jobs against each other. I think there were a lot of factors beyond our control that were part of the decision."

Gates said Kimberly-Clark, originally founded in Neenah, Wisconsin, in 1872, has a longer legacy in Wisconsin than in Arkansas, and added that the company is still closing another facility in that state as part of a global consolidation plan.

Hinkle said AEDC would help train Kimberly-Clark employees for employment elsewhere.  

"We are going to work with other state agencies to ensure that that workforce is prepared and trained and able to transition to other jobs," she said. "We have a lot of really great advanced manufacturing facilities here in the state that are always looking for highly trained and skilled employees."

Gates said the things that allowed Kimberly-Clark to succeed in Conway would be available to a future employer.

"The quality of workforce, the political and business climate, the facility itself — those were assets for this company yesterday," he said. "And those are the things that we want to let the next company know about starting today. Those are still here, and that process starts for us right now."

In a statement emailed to Arkansas Business late Thursday, Conway Mayor Bart Castleberry said, "I have a number of friends who have worked or retired from Kimberly-Clark. For me, what this boils down to is people. I have a good friend from high school who works with me in city hall. Their spouse lost their job today. These individuals have made a career with Kimberly-Clark to provide for their families. 

"As a city, we will do everything we can to help the dedicated employees of Kimberly-Clark find a new place to earn a living so they can care for their families," he said. "My first concern is with the employees and their families.

"Hopefully, other opportunities and prospects will open in the future. Conway remains a desirable place for industry. We have a tremendous workforce, and we have a lot to offer as a city," the mayor said.

Kimberly-Clark plans to keep its plant in Maumelle open.

Kimberly-Clark, based in Irving, Texas, since 1985, makes brands including Kleenex, Scott, Huggies, Pull-Ups, Kotex and Depends. The plant closure is part of a global restructuring program announced in January that the company said will save up to $550 million a year by the end of 2021. 

In all, the company expected to lay off 5,000-5,500 employees, or 12 to 13 percent of its workforce, and to close or sell 10 manufacturing facilities.

At Walker's news conference in Wisconsin, state officials and workers cheered the announcement that their plant had been saved. But David Breckheimer, a United Steelworkers Union president, noted that "we are also mindful of those out of state" who are being affected by the news.