TimkenSteel Corp., a manufacturer of steel products, will shutter a Houston plant after nearly 50 years in operation amid a slowdown in the energy sector that has hurt demand for the company’s services in Houston.
Source: Houston Chronicle
The closure early next year will result in around 100 layoffs, the company said.
TimkenSteel expects to save between $6 million and $8 million annually by closing its plant, which provided precision and finishing services to customers that service the energy market. The plant is located at 14730 Yarberry St. in north Houston.
“This change to how we serve the evolving energy market will improve the company’s financial performance,” said William Bryan, executive vice president of manufacturing and supply chain, in a statement.
The Houston facility, opened in 1972, provides deep hole boring and finishing services to the oil and gas industry, services that are part of the process for converting steel bars and seamless mechanical tubes into specialized oil and gas well drilling and completion tools, such as drill collars, blast joints and packers.
The energy sector has slowed in recent months as oil and gas prices remain mired in the $50 to $60 range, and companies, contending with falling profits and stock prices, cut back. The number of oil and gas rigs operating in the United States have plunged almost 30 percent since the start of the year.
Those cutbacks are subsequently felt in industries that support the energy sector, such as manufacturing.
In early October, CEO Tim Timken stepped down, and was replaced by interim CEO Terry Dunlap.
“We are acting with urgency and pace to improve profitability, cash flow and shareholder value,” said Terry Dunlap, interim chief executive officer, in a statement on the company’s recent earnings.
The plant in Houston is the TimkenSteel’s only facility in Texas. After its closure, the company will have five manufacturing plants in the United States.
