Tenaris announced today it will lay off 90 employees and slash production at its Sault Ste. Marie facility by 25 percent based partly on an increase in imports to Canada as fallout from U.S. President Donald Trump's tariffs on steel and aluminum.
The TenarisAlgomaTubes plant will suspend operations for three weeks starting Dec. 15.
The move comes as Tenaris chairman Paolo Rocca faces serious legal trouble in Argentina. Bloomberg reported Wednesday that an Argentinian judge has indicted the billionaire Tenaris majority shareholder as part of a graft case.
The text of today's announcement from Tenaris follows:
Tenaris announced on Nov. 29, 2018 it is reducing production levels at its seamless pipe manufacturing facility in Sault Ste. Marie, Ontario by 25 percent as a result of market challenges. Accordingly, Tenaris anticipates the temporary layoff of approximately 90 union employees as of Dec. 15, 2018. Tenaris communicated with employees and union executives during a town hall today.
The market is challenged by three main factors:
- A surge in energy tubular imports diverted to Canada by third countries constrained from exporting to the United States due to Section 232 measures
- A decline in AlgomaTubes’s export sales to the United States
- Challenges in the national oil and gas market where export bottlenecks are affecting the price Canadian oil and gas customers are receiving for energy production.
“These are difficult decisions that have resulted from high volumes of energy tubular imports, trade actions against Canada that remain unresolved, and Canadian oil and gas producers activity adjustments due to the widening price differential for their energy,” said Guillermo Moreno, President – Canada, Tenaris. “Our production levels remain above those in 2016 when we resumed operations. We are trying, where possible, to reduce the impact to our employees. We remain committed to domestic manufacturing and serving Canada’s energy industry.”
To adjust to the circumstances, Tenaris’s AlgomaTubes facility will suspend operations for three weeks effective Dec. 15, 2018. Operations will resume Jan. 7, 2019.
Tenaris continues to work with industry and governments to defend against steel import surges, and fight for steel access to the U.S. market and get Canada’s energy to market.