COVID-19, oil price war trigger Vallourec layoffs
YOUNGSTOWN — Cuts Vallourec is making to its North American workforce will affect employees at one of the company’s mills in Youngstown.
Vallourec affiliate VAM USA, LLC is permanently cutting 59 workers at the connection threading mill on Ohio Works Drive, according to a notice the company filed with the Ohio Department of Job and Family Resources.
The company cites “unprecedented issues” surrounding the novel coronavirus pandemic and oil price war between Russia and OPEC (Organization of Petroleum Exporting Countries) as the reasons for the workforce reduction.
“These unforeseeable business circumstances include the unanticipated and dramatic drop in oil prices and the major downturn in the U.S. economy, which have resulted in a substantial decline in the demand for the company’s products and services and a significant reduction in its incoming receivables and cash flow, putting the Company in the difficult position of having to reduce its workforce,” wrote Garrett Francis, president of VAM, in the letter known as a Worker Adjustment and Retraining Notification.
The layoffs will happen over the two weeks starting April 30.
It’s unclear if layoffs will happen at Vallourec’s other facility, Vallourec Star, a melt shop and rolling mill on Martin Luther King Jr. Boulevard that produces seamless steel pipe for gas and oil exploration.
The French company announced Monday it was cutting more than one-third of its workforce in the U.S., ore more than 900 employees, including contractors. The cuts are to be across all plants and their support functions over the coming weeks.
The company also operates threading and production plants in Houston and Oklahoma.
Edouard Guinotte, management board chairman for the Paris-based company, said the cuts are “necessary in a quickly deteriorating environment” but preserve the companies’ ability to serve customers.
“The world and the oil and gas industry are living through extraordinary times, particularly in the U.S.,” said Guinotte.
In all countries Vallourec is taking the appropriate measures to adjust working hours to activity levels, reduce fixed costs and investments as well as implementing strict safety measures to protect all employees from COVID-19.