Vallourec Star Places More Workers on Layoff

YOUNGSTOWN, Ohio – Continued woes in the oil and gas industry have forced pipe and tube manufacturer Vallourec Star to “reduce its workforce effective this week,” according to a statement released Tuesday by the company.

The company said it isn’t releasing the number of employees affected at this time.

“While we have already taken substantial measures throughout the year, market conditions have not improved,” Vallourec Star President Judson Wallace said in a statement. “The prolonged downturn continues to impact business. This extremely difficult decision is necessary for us to remain competitive in a very challenging environment.”

Oil and gas prices have plummeted since the beginning of the year, reducing the rig count and drilling operations throughout the country. Three years ago, Vallourec opened a $1 billion pipe and tube mill here to compliment its existing operations on Martin Luther King Jr. Boulevard.

The plant manufactures pipe and tube used in the oil and gas markets, which soared five years ago because of increased shale production.

However, those operations have slowed because energy companies are finding it difficult to be profitable in such a weak pricing market.

In July, Vallourec announced it would place on layoff between 60 and 80 employees because of the downturn.

Reductions in both hourly and salaried ranks will occur across all areas of the company’s production and administrative departments, the company announced.

“We recognize this action is difficult for our employees, their families and the community,” Wallace said. “We have a talented and skilled workforce, we appreciate their dedication and will do what we can to assist them in this transition.”

All of those affected employees will receive a severance package, the company said.

Vallourec is undertaking a variable schedule operation between its two Youngstown pipe mills because of reduced volume and team members will work between both mills, according to the announcement. The new scheduling approach improves costs and start up time, “allowing for a more lean and agile production process,” the company said.

“Vallourec Star is taking these steps to remain competitive over the long run. The company is optimistic that productivity improvements and investments in innovative technologies and equipment, such as a new state-of th- art-piercer in Youngstown’s multi-stand pipe mill, will reinforce Vallourec’s position as a market leader when business rebounds.”

Vallourec, the French company that operates mills here,  said July 31 that  it lost 199 million euros, or $217 million, in the second quarter, and its CEO expected 2015’s full results to reflect the “worst-case scenario.”

Vallourec eliminated 1,600 jobs worldwide during the first half of the year, including “60 to 80” jobs at its pipe mill here in early August.

Copyright 2021 The Business Journal, Youngstown, Ohio.