Image courtesy of George Trian/U.S. Navy.
U.S. Steel to lay off 750 pipe workers amid oil price downturn
The company will lay off 614 workers at its Lorain, Ohio plant Monday and plans to idle the plant in March.
The layoffs will be effective as of March 8, Reuters said.
An additional 142 employees who work at the company’s Houston plant will also be laid off.
The Pittsburgh-based company said additional layoffs could occur through May.
“The company has suddenly lost a great deal of business because of the recent downturn in the oil industry. What appeared just a few short weeks ago as being a productive year… has most abruptly turned sour,” the United Steel Workers Union said.
The Lorain plant produces over 700,000 tons of pipe per year while the Houston plant produces over 100,000 tons of pipe per year.
Demand for oil country tubular goods spiked over the last few years as explorers and producers invested in new shale and offshore projects.
However, slumping oil prices have forced many upstream companies to curb capital expenditures and cutback on pipe purchases.
According to the OCTG Situation Report total spending on oil exploration and production will drop by about 20 percent this year from 2014.
U.S. Steel has also been contending with a glut of steel on the market and five straight years of losses.
Last year, the company shut down a plant in McKeesport, Pennsylvania and in Bellville, Texas citing increased pressure from foreign imports.
Those two plants remain shut down.