As foreign competitors deal with U.S. tariffs on imported metals, a Chinese air-conditioning manufacturer plans to keep its edge with help from a maker of copper and aluminum parts in Springdale.
After months of planning, American Tubing International is being acquired by Sanhua Holdings Group, a global leader in the heating, ventilation and air-conditioning sectors, officials said Thursday.
"By far this ownership is the best move that we've ever had," said Chuck Lewis, president of American Tubing. "This takes us into a completely different plateau of business, being able to increase jobs here, and be able to increase the product line that we have here."
Neither company disclosed acquisition terms or the number of jobs impacted by this new deal. In attendance were elected officials and representatives of Gov. Asa Hutchinson, Sens. Tom Cotton and John Boozman and the Arkansas Economic Development Commission.
After voters recently approved a nearly $200 million bond issue for the city, Springdale Mayor Doug Sprouse shared plans to invest $4 million to $5 million on road infrastructure improvements to open up traffic flow near the manufacturing site.
Officials were hesitant to disclose job estimates Thursday morning, but assured that new jobs will be created in the region.
"We do not know for sure yet, but we believe there's potential for 100 to 150 jobs in the next two years," Lewis said.
American Tubing, established in 1976, employs more than 400 people. The Springdale company makes copper and aluminum components for air conditioners. Sanhua Holdings makes products for the heating, ventilation and air-conditioning industry from those components.
Sanhua's president, Yabo Zhang, said he admired the state's culture and looked forward to working with the employees of American Tubing.
"I'm very confident with the merging of the cultures being very successful," Zhang said.
Sanhua, founded in 1984, employs 17,000 people globally and has operations in Europe, China and North and South America. American Tubing is Sanhua's second acquisition in the U.S. and third factory in North America.
Lewis said talks between both companies began in October and solidified at the end of March. At the time, President Donald Trump announced plans to impose U.S. tariffs on imports of steel and aluminum and a litany of Chinese goods.
At the conference, Zhang did not explicitly say how large a factor the temporary tariffs played into the acquisition of the Springdale manufacturer.
"For us, we just want to focus on what we are doing," Zhang said. "What is our service to our customers, in any situation we need to service our customer. This is the only thing we think about."
Lewis said the ownership change is not entirely contingent with current international trade uncertainties, but they do have "some impact."
"Because some of the products that we're talking about moving from China to Springdale have a tariff on it," Lewis said. "And so by making it here there won't be a tariff and the customers are excited about that."
State Rep. Jeff Williams, R-Springdale, said the deal with Sanhua is "in part a direct response" to recent tariffs the U.S. enacted on imported metals.
In conversations with Sanhua's president and vice chairman of the board, Williams said they spoke of this as "a way to be able to avoid any additional tariffs that may be put into place or tariffs that currently exist. They're simply going to move that manufacturing from China to Springdale. So obviously there are positives and negatives to any kind of tariff situation that occurs, but in this particular instance it's a great positive."
Mervin Jebaraj, director of the Center for Business and Economic Research at the Sam M. Walton College of Business at the University of Arkansas, Fayetteville, sees the agreement as part of a trend that predates tariff implementations by the U.S: Jobs that once were moved overseas have been coming back.
"Most of this stuff was already happening," Jebaraj said. "Most of the impetus to do this is wages in manufacturing [have] gone up and it makes sense to reshore over here where the products are being made ... the tariffs are the icing on the cake."
Business on 07/20/2018
Print Headline: Chinese AC maker buys Springdale firm