Specialty steel wire manufacturer Tokusen USA Inc. is closing its facility in Conway after 34 years amid challenging market conditions and international trade pressures.
The closure is set for mid-March. About 250 workers are losing their jobs. The company’s workforce is the seventh-largest among manufacturers in Faulkner County.
Tokusen, a subsidiary of Tokusen Kogyo Co. Ltd. of Ono, Japan, said in a statement that its business “has been troubled for many years.” The company makes wire cord for U.S. tire manufacturers, which have seen sales slow significantly. Trade publications like Modern Tire Dealer report that the tire market is returning to pre-pandemic levels following unusually strong years in 2021 and 2022.
Meanwhile, cheap imports from Asian countries have shrunk U.S. tire makers’ share of the market, prompting layoffs and plant closures at Sumitomo Rubber, Michelin and Bridgestone.
Tokusen also faced rising costs from the 25% tariff on imported steel imposed by the first Trump administration. In 2018, the company told Arkansas economic officials that the Conway factory could close if it wasn’t awarded an exemption to the tariff. The company’s products require a kind of wire rod that it says is unavailable in the U.S., forcing them to import it from foreign companies.
Eric Schuenemeyer, the company’s vice president of operations, told Arkansas Business that the company received an exemption but costs still increased due to regulations aimed at protecting the value of domestic steel. He said antidumping rules, in particular, have contributed to a complex and expensive importing environment.
The Conway plant closure comes as the company faces the prospect of new tariffs. Trump has vowed to impose universal tariffs of 10% to 20% on foreign imports in his second term, with additional levies targeting Chinese goods, along with a potential expansion of the existing tariffs on steel imports.
Tokusen does source some of its wire rod domestically. The company’s website says all of its steel fibers made for ultra-high-performance concrete are “Made in the USA using high carbon steel rod from a US-based mill.”
Jamie Gates, executive vice president of the Conway Area Chamber of Commerce, said a combination of factors led to Tokusen’s decision to close the facility.
“International trade is complicated and volatility is hard — and that’s for all manufacturers,” he said. “I think the trade climate is a part of it. I think there’s a substantially shrinking domestic tire market, but that’s also a function of international trade.”
Gates said the chamber met with Tokusen leaders on Tuesday about the plant’s closure. He said the chamber is working with the company to ensure every worker “doesn’t miss a paycheck and has an opportunity to advance their career locally.” The chamber has contacted about a dozen local manufacturers about job opportunities.
Gates said the chamber will also work with state and local economic leaders to find a new occupant for the roughly 500,000-SF factory. The facility opened in October 1990 with 160 employees producing 300 tons of steel cords per month. An expansion completed in 1996 created dozens of new jobs and raised capacity to 2,400 tons per month.
Over the years, the company’s product range expanded to include metal wire for the music industry, ultra fine wires for medical and testing applications and nano silver flake for printed electronics.
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