We pointed out a number of causes for these closures but at the end of the day there is no single overarching reason, looking at closures over the past couple of years suggests a mix of economic, operational, and market factors. Here are a number of the main ones;

1) Consolidation Through Acquisitions; Many closures stem from larger companies buying smaller ones and then shutting down redundant facilities to streamline operations. For example, Thermal Process Holdings acquired Certified Heat Treating in Springfield, Ohio, and closed the plant, moving equipment and work to other sites within their network. This pattern reflects broader industry consolidation, where bigger players absorb smaller shops to reduce overlap and boost efficiency.

2) Tariffs and Rising Costs; Trade tariffs, particularly on imported materials or equipment, have increased operational expenses, making it harder for some shops to remain profitable. This has been cited as a contributing factor in multiple closures. (An example of a shop closing because of increased tariffs would be AMAC Industries of Cleveland, Ohio).

3) Shift to In-House Heat Treating by Manufacturers; Some manufacturers are bringing heat treatment processes in-house to cut costs and improve control, reducing demand for external commercial services. This trend has led to lower volumes for independent shops, forcing some to close.

4) Overcapacity and Market Uncertainty; The commercial heat treat sector has excess capacity relative to demand, exacerbated by slowdowns in key industries like automotive. Economic uncertainty in these sectors has prompted adjustments, including closures to right-size the market.

5) Outdated Technology and Lack of Investment; Shops relying on older equipment or processes struggle to compete with modern, efficient alternatives. Without upgrades, they face higher maintenance costs and reduced competitiveness, leading to unprofitability-witness the departure of small batch IQ furnaces and pusher lines both of which were once mainstays of the heat treatment market.

6) Poor Management or Retirement; In some cases, closures are due to mismanagement (including stupidity and incompetence as we have mentioned in the past) and retirement.  An example of retirement would be Katy Heat Treat in Texas which shut down in mid-2025 as its long-time owners sought a change.

7) Low Profit Margins; Overall profitability issues, driven by the above factors, make it unsustainable for marginal operations to continue. Even with a stable market, shops without strong niches or efficiencies are vulnerable.

Not all heat treat segments are equally affected—some areas like aerospace or specialized services are expanding.

 

Watch for continuing coverage from “The Monty” about changes and trends in the commercial heat treatment market.

Commercial Steel Treating, Michigan; https://themonty.com/another-usa-commercial-heat-treater-closes-its-doors/?no_cache=1