Vallourec Star planning temporary shutdown

Vallourec Star to change schedules

YOUNGSTOWN, Ohio (WYTV) – Vallourec Star announced Wednesday that it plans to shut down its Youngstown operations for three weeks starting in mid-February, according to a press release.

The move comes as prices for oil and gas are declining. “The economic realities we are facing require additional action,” the company said in the release.

During the shutdown, team members will be allowed to schedule vacation or paid time off, or file for unemployment, and can still receive coverage from their health care plans. Team members will return to work after the shutdown period.

Mike Chadsey with the Oil and Gas Association said word of the shutdown didn’t come as a surprise given the falling global prices for oil and natural gas but says there is no reason to panic.

“Get out of your mind Boom and Bust cycle. This is an ebb and flow. This is a global commodity. There are lots of other things at stake here than just what is happening here in Northeast Ohio,” Chadsey said.

The parent firm of Vallourec Star issued a statement indicating the company had been working to keep up with changes in the market and minimize their effect on employees, adding that the situation has now reached a point where workers will be impacted calling it both unfortunate but unavoidable.

Michele Lepore-Hagan issued a statement on the shutdown, part of which said:

Vallourec Star’s initial decision to invest in Youngstown was informed in large part by our worker’s expertise in manufacturing and the robust work ethic found in Northeast Ohio— nothing about that has changed. I remain hopeful that changes in the oil and gas market will not negatively affect our area in the long-term. The sooner our folks can get back to work, the better.”

The company is also offering a six-month voluntary lay off for interested team members. Health care coverage will continue for those who take the voluntary layoff, according to the release.

Youngstown Mayor John McNally said he is encouraged by the fact that Vallourec is offering benefits to its employees during the down time.

McNally said Vallourec accounts for about $500,000 per year in income tax for the city and a three week shutdown would cut in to that. However, he says the decrease is “manageable.”

Other smaller, local companies are also feeling the effects of the downturn in the oil and gas industry. TMK IPSCO, which has plants in Brookfield and western Pennsylvania, is laying off workers.

But the work stoppage isn’t all bad. Chadsey says the slowdown allows producers to catch up and in the end that will boost the market.

“What is does is give pause for the producers to allow the mid-stream industry to catch up, get a lot of pipe in the ground so that we can get those wells online and get this product to market,” Chadsey said.

Vallourec announced Jan. 26 that operating plans and schedules could be changed due to falling prices.

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