TOKYO — Japanese materials maker Toray Industries will reduce staffing at its U.S. carbon fiber business by 25% in response to the lack of demand from client Boeing, Nikkei learned Tuesday.
The job cuts will occur at Toray Composite Materials America, a subsidiary based in Washington state that employs hundreds of people.
The unit suspended operations at a carbon fiber thread plant in the state of South Carolina. There is no anticipated restart date, Toray said. The group’s aggregate carbon fiber production capacity in the U.S. is expected to shrink by 10%-20%.
Toray processes carbon fiber threads in the U.S. state of Arizona, as well as in Japan. The plant in Washington, which produces carbon fiber composite materials, will reduce its utilization rate.
Boeing procures carbon fiber composite material from Toray to construct wings, fuselages and other critical components for the 787 passenger jet. But economic fallout from the coronavirus pandemic has prompted the American aerospace company to halve its monthly output of the 787 to seven units by 2022.
Toray is the world’s biggest producer of carbon fiber, holding a global market share approaching 50%. Revenue from this segment is projected to diminish 20% to 185 billion yen ($1.72 billion) for the fiscal year ending March 2021. Segment income likely will slip to a loss of 12 billion yen for the same period.
The aerospace industry accounts for roughly half of Toray’s carbon fiber segment. The company plans to develop demand in wind turbines and hydrogen fuel cell vehicles.