UPDATE | Vallourec Star will shut down for three weeks

YOUNGSTOWN

Girard Mayor Jim Melfi said the city will have to “manage accordingly” with its budget after Vallourec Star announced it will shut down for three weeks as it assesses the current market for pipe products.

“It’s something we don’t want to see happen,” he said.

Last year, the city of Girard received $475,000 in payroll tax from the company.

On the other hand, Melfi said he recognizes that its a cyclical business.

“I don’t think it is a big surprise given the climate with the gas prices,” said Guy Coviello, vice president of government affairs for the Youngstown/Warren Regional Chamber. “I think long term everyone is still confident of what is going to happen here.”

Crude oil prices were floating between $50 to $55 a barrel Wednesday morning. Oil prices have fallen 50 percent since June when it was above $100 a barrel.

The company announced this morning that it would shut down the operations on Martin Luther King Jr. Boulevard in Youngstown for three weeks. The about 700 team members at the plant will be able to schedule vacation, paid time off or file for unemployment.

“In response to the declining oil and gas market, Vallourec Star continues to adapt our operating plans to business demands,” the company said in a statement. “We have already taken some measures to adjust production schedules, negotiate with suppliers and minimize the use of contractors. The economic realities we are facing require additional action. In developing and implementing these steps, we have taken all measures to minimize the effect on our Vallourec Star employees. However, we are at a point where some employees will be affected. This is unfortunate but cannot be avoided.”

Team members will return to work after that blackout period. The company is offering a six-month voluntary layoff for those interested. Healthcare coverage will continue during that six month period.

“We are carefully monitoring market developments and will continue to adapt quickly to this unstable business environment,” the company said.