CHICAGO — Energex Tube has laid off 94 employees at its operations in Welland, Ontario, and the city’s mayor and a union official say that the company is considering permanently closing a pipe mill at the location.
The most recent cuts have reduced Energex Tube’s work force in Welland to 126 employees from 220, Doug Orr, national representative of the Canadian Auto Workers (CAW) union, told AMM Wednesday.
The same day, Welland Mayor Barry Sharpe told AMM that the layoffs, which are permanent, were announced last week and will take effect in January.
Both Orr and Sharpe said they hoped Energex Tube parent company JMC Steel Group Inc., Chicago, would continue to make steel pipe in Welland.
JMC, which acquired the Welland site from the former Lakeside Steel Inc. (amm.com, April 4), didn’t respond to requests for comment. The company has previously said that the mill wasn’t expected to be shuttered (amm.com, July 6).
The company in early summer had announced 110 job cuts (amm.com, June 29).
The latest layoffs mean that Energex Tube’s 8-inch-diameter pipe mill in Welland, which is "very, very old" and in need of a "massive injection of money" to be competitive, could be closed for good, Orr said.
"Energex used the phrase ‘idled.’ ... We believe it’s shut down permanently," he said. "Other mills that are more modern probably have one-third the work force. ... So it’s pretty difficult to compete."
Sharpe largely agreed with that assessment of the 8-inch mill. "That is our understanding as well," he said. "It is certainly being mothballed."
That’s tough news in a city that has been making pipe for more than 100 years, he said.
Orr noted that the layoffs also affected the upsetting and threading operations at the Welland facility. However, while these operations have been scaled back, "it is to be determined whether it will be idled down the road," he said.
Orr and Sharpe also stressed that investments made by JMC at Energex Tube’s stretch reduction mill in Welland indicated that the company didn’t plan to leave the city.
"Like so many other heavy industry cities, we have to keep looking on the positive side," Sharpe said, adding that Welland is offering Energex Tube as much help as it can, including lobbying the province of Ontario for more favorable water and electricity rates.
The CAW is looking to reduce permanent layoffs at Energex Tube’s Welland operations through incentivized retirements and other measures, Orr said. But getting its stretch reduction mill running at capacity is also a top priority, he added.
"We are optimistic that when the market picks up we can put some additional volume on there, and that obviously would generate a need for more manpower," Orr said.
The stretch reduction mill makes tubulars for the oil and gas market, which is soft at present but is cyclical and could rebound enough for the facility to potentially operate at full capacity, he said.
"The (stretch reduction mill) is the jewel of that plant and the strength of that plant over the last several years. We hope to get it back to that (position)," Orr said.