Tenaris Algoma Tubes to lay off 180 as oil prices fall (update)

The president of USW Local 9548 says layoffs at Tenaris Algoma Tubes were “kind of inevitable” given the market price of oil, which reached a five-year low this week.

Still, the timing of this morning’s news that 180 hourly employees would be temporarily laid off as of January 5 came as a shock.

Dave Richie, whose union local represents workers at the Sault Ste. Marie tube mill, said union executive members were told by company officials six days ago that it expected to be able to maintain production levels until the end of February.

Richie said he doesn’t fault the company given the falling price of oil.

“That’s basically what we have to live by and what’s affecting everybody’s lives here in Sault Ste. Marie,” said Richie.

He said the union is working with the company to ensure the layoffs occur as per the collective agreement.

For now, union officials are hoping for a rebound in the price of oil.

“We all hope that. Nobody has a crystal ball,” said Richie, noting that oil prices could go lower.

Steel pipes produced by the Tenaris Algoma Tubes facility in the Sault, which employs approximately 650 people, are sold to Canadian and U.S. customers for a variety of industrial uses, including oil and gas pipelines.

Earlier coverage:

Falling oil and gas prices and ‘unfair’ imports are being blamed for 180 temporary layoffs announced to staff today by Tenaris Algoma Tubes.

The Sault plant will also implement a shutdown from Christmas Eve until January 5.

“We do not take this decision lightly. Employees are our most valuable resource and we understand the impact this has on them,” said Tenaris Algoma Tubes spokesperson Chris Belsito. “This morning, once this decision was made, the company began communicating to the employees as quickly as possible and informed the union, following the process defined by the Collective Agreement. Affected employees maintain their recall rights dependent on seniority.”

Reduced activity in the oil and gas sector and imports the company says are “unfair” led it to adjust shifts to align with production levels, said Belsito.

Tenaris says the issue with imports is under investigation by CBSA and CITT.

Belsito said the decision to implement temporary layoffs is consistent with positioning the company for the long term.

Investments in equipment, technology and training will continue.

“The company remains committed to the facility, the community and Canada as it continues to offer high quality produces and services to its customers,” he said.