Tube mill situation described as 'hopeful'

The Sault continues to wait anxiously for conditions to change after approximately 25 local salaried employees were laid off from Tenaris Algoma Tubes April 8, in addition to the 510 tube mill workers already laid off in waves since December.

David McHattie, Tenaris Canada's institutional relations director, speaking to SooToday Tuesday in a telephone interview from Calgary, would not comment on the most recent layoffs.

However, McHattie said "we do expect to recall 240 employees in May (as planned)."

The layoffs stem, in part, from the declining price of oil and a resulting decline in oil drilling activity in North America.

"I think we're the same as everybody else, we don't know when the market will recover but we're preparing the facilities (the Sault tube mill) to be ready for when it recovers and we still have 100 employees working today in the Sault," McHattie said.

"Part of what they're doing is working on maintenance projects and investment projects that have been planned for some time in order to prepare ourselves for the oil and gas industry, which we still believe to be a very viable market."

Another cause for the layoffs is increased dumping (sales of imported steel pipes from several countries at below fair market price).

The complaints from Tenaris and other pipe producers regarding dumping have been aimed at companies from Chinese Taipei (Taiwan), India, Indonesia, the Philippines, South Korea, Thailand, Turkey, Ukraine and Vietnam. 

The Canadian International Trade Tribunal (CITT) confirmed April 2 there have been increased sales in unfairly priced imports from those countries.

That ruling from CITT follows an earlier determination on dumping from the Canada Border Services Agency (CBSA) March 2.

Accordingly, anti-dumping measures have been taken.

"The Canada Border Services Agency (CBSA, representing the federal government) receive all of the products (pipes) at the border, policing the border and determine the level of dumping.  Anyone (a company from a foreign country) who wants to import those products must request from the CBSA what the specific normal value would be for that sale (and agree to sell at that price)," McHattie said.

"It's a way of making sure the prices of those products coming into Canada are at that fair market price (and not unfairly undercutting the price of Canadian-produced pipes and threatening Canadian jobs)."

With anti-dumping measures put in place, will this lead to a quicker call back to work for all 510 laid off Tenaris Algoma Tubes employees?

While not committing to that, McHattie said "it is a good sign."

"We are encouraged with this result, and this will lead to a recovery sooner than if the case was not put in place." 

"We have 240 employees coming back in May, and we're hopeful that with the trade remedies in place, once market recovery begins to occur that we will compete in these fair market conditions and we're hopeful for the medium term future of our Canadian business," McHattie said.

"We continue to be committed to domestic production for domestic oil and gas needs and we're optimistic for the future of the Canadian oil and gas activity, therefore we're optimistic for the future of Tenaris Algoma Tubes and all of our employees."

(PHOTO: Tenaris Institutional Relations Director David McHattie speaks to a Sault Ste. Marie Chamber of Commerce audience in September, 2014. Darren Taylor/SooToday)