About 1,300 Marion autoworkers will lose their jobs by mid-2027 after Hino Motors of Japan announced it would close its Crittenden County plant and exit the auto parts manufacturing business, shuttering the city’s largest employer.
Local and state officials said they were first notified of the closing Friday — the same day that Hino released a disclosure statement to the investment community about the shutdown.
News of the closing spread Wednesday with discovery of the May 31 disclosure posted on the company’s investor relations site after the Hino board of directors decided the plant was unprofitable with no sign of recovery. Hino noted the Marion plant was crippled by a $189 million operating loss for the fiscal year ending March 31.
“We have concluded that recovering sustainable profitability is difficult, and thus have decided to withdraw from this business,” the disclosure said of products manufactured at the 563,000-square-foot factory in Marion’s Railport Industrial Park.
Secretary of Commerce Hugh McDonald said Wednesday that the state is beginning outreach to support the displaced workers.
“Our team is aware of the announced closure at Hino Motors manufacturing in Marion and is working to find solutions to minimize the impact,” McDonald said. “We are working across our divisions at the Department of Commerce to provide resources and services to help the local community and affected workers.”
The plant has produced axles and other suspension components for Toyota vehicles since investing about $160 million to build the facility in 2006. The plant expanded in 2013, with another investment valued at more than $100 million, to locate a Toyota business unit at the facility and add more equipment to increase production. With that, the company expanded the factory by 110,000 square feet for production of Toyota Tacoma rear axles and front knuckle assemblies, which began in 2017.
Hino has told local officials the plant will shutter completely, with staggered job cuts beginning after this year. The company, in another statement, outlined a plan to “realign its focus, prioritizing the core business of the company: commercial trucks.”
Davey Jung, president of Hino’s U.S. manufacturing operations, said in a statement that it was a “difficult decision” to close the plant and praised state and community leaders for their commitment to the facility.
Marion Mayor Tracy Brick said Wednesday local and state officials can take some relief in knowing they have about three years to make up for the job losses, adding that Hino management has indicated to the city that the slowdown will be gradual. The factory is one of the largest employers in the Memphis metro area and employees commute from several nearby cities.
“It’s hard news for the city, and it’s really hard news for Hino itself — and especially their employees,” Brick said. “We’ve already laid the groundwork with the Arkansas Economic Development Commission to plan a process. Right now, we are waiting to get direction from management at Hino on exactly how they want us to be involved with the employees.
“What we discussed on Monday is that they will start slowing production, and they assured us we won’t see any change in the number of employees through the end of 2024,” he said. “In 2025, they’ll slow production and start eliminating lines. If there is a silver lining, (it’s that) they have given us plenty of notice.”
Arkansas has an unsteady history with Toyota going back two decades to 2003, when the automaker selected San Antonio, Texas, over Arkansas to locate a full-size pickup assembly plant. The rejection led Arkansas lawmakers to back a constitutional amendment that allowed them to issue debt to pay companies for creating jobs in the state.
Then, in 2007, Arkansas again heavily recruited Toyota for a $1.3 billion SUV manufacturing plant for the Marion area. Tupelo, Miss., was selected for the site despite Arkansas’ offer of $100 million in incentives to locate in the state.
Crittenden County had an unemployment rate of 3.7% in April, above the overall state rate of 3.4%. Employees, Hino said, will receive severance pay, extended healthcare, end-of-service bonuses and outplacement services.
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