The downturn in U.S. oil drilling will prompt EVRAZ to lay off up to 200 workers at its Pueblo steel mill starting Sunday, the company announced Wednesday.
Seamless pipe used in the oil field industry is among the three main products made at the 1,000-plus worker plant. The others are rail and rod-and-bar.
It is the second largest layoff announcement in Pueblo this month.
The iQor call center at 317 N. Main St., formerly the Receivable Management Services call center, recently notified the state of its plan to cut up to 251 jobs by March. The call center cited the loss of a major account.
“I feel bad for the employees and the families,” Pueblo City Council President Steve Nawrocki said of the layoffs. “Hopefully, it’s a short term thing and those jobs will be recaptured, at least at the steel mill.”
Nawrocki acknowledged frustration at the setback in Pueblo’s efforts to recover from the Great Recession. “It seems like every time we make a step forward, then we go back a step,” he said.
Rod Slyhoff, director of the Greater Pueblo Chamber of Commerce, said he is optimistic the steel jobs will return when oil prices and drilling activity rebound.
“Anytime we see oil prices drop as they have done over the last several months, the tube mill has always gone through layoffs because the work is tied to exploration,” Slyhoff said. “The thing about oil prices is we know it’s going to go up again and once they go up again the tube mill will go back into production.”
The loss of the 450 jobs between the steel mill and the call center will be
a blow to Pueblo’s ongoing efforts to rebound from the Great Recession, Slyhoff said. “It is going to effect the recovery,” he said. But Pueblo’s economy is in better shape to handle such losses and so the impacts likely will be more limited than otherwise, he said.
Pueblo Economic Development Corp. President Jack Rink said the layoffs are “an example of how, in a worldwide economy, jobs in our community can be affected by things that are completely outside of our control.”
Communities must stay vigilant in their job creation efforts, Rink said.
“You can never rest,” he said.
EVRAZ is the second U.S. steelmaker to announce layoffs in the wake of falling oil prices and a decline in drilling activity.
Earlier this month, U.S. Steel, citing the slowdown in drilling, announced 756 layoffs at its seamless pipe plants in Cleveland and Houston.
Immediately after the U.S. Steel announcement, EVRAZ executives declined to comment on whether the company planned to cut jobs at the Pueblo seamless pipe unit. The officials also declined to comment on media reports that the company delayed its plan to sell stock in its North American division due to an order slowdown.
On Wednesday afternoon, EVRAZ issued a statement announcing the layoff plan at the Pueblo plant.
“Due to declining oil prices and significant reductions in drilling programs. EVRAZ is making production adjustments and temporarily crewing down where needed,” according to a statement issued by EVRAZ North America senior communications manager Melodie Ruse.
“Today, we announced that we will temporarily curtail production at our seamless pipe facility in Pueblo . . . The temporary layoff affects up to 200 employees. We continue to closely monitor the market and will bring these employees back to work as soon as we can.”
Seamless pipe and other oil country tubular goods accounted for 17 percent of EVRAZ North America’s total sales in 2013, Ruse said.
EVRAZ North America is headquartered in Chicago. The parent company is headquartered in Russia.
A worker in the Pueblo seamless pipe unit, who declined to give his name, said employees were called into meetings to be briefed on the layoffs. Plant managers encouraged the workers to apply for unemployment benefits, he said.
The employees also were told they could get called back to work for periodic stretches as new orders warrant, he said.
A message left Wednesday afternoon with local United Steelworkers leaders was not returned.
A person answering the telephone at the union’s Pueblo office said local leaders were in meetings about the layoffs and were not immediately available for comment.
This article was written by Dennis Darrow from The Pueblo Chieftain, Colo. and was legally licensed through the NewsCred publisher network.