The oil services company says it can no longer produce competitive steel pipes in Western Europe.
Less than two years after an earlier redundancy plan, Vallourec announced on Wednesday the cessation of its European seamless tube manufacturing operations. This will lead to the closure of several factories, including in Germany and Saint-Saulve (north), he said. A total of 2,950 jobs will be cut worldwide. The challenge, as presented by the group’s new CEO, Philippe Guillemot, is to stop the flow of money. The group emerged in February 2021 from a restructuring plan that saw 1,000 job cuts (including 350 in France) and a seizure of power by creditors. A recapitalization of 300 million euros followed in June 2021. Vallourec was slightly profitable in 2021.
“Faced with competition from Eastern European countries, Europe can no longer be a production base for tubes destined for the Middle East or other regions, argues Philippe Guillemot. Our competitors drew this conclusion a long time ago.The group put its German pipe plant with 2,135 employees up for sale at the end of 2021. For seven years, the site devoured 100 million euros a year. In the absence of a buyer deemed reputable, Vallourec announced its closure on Wednesday.
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end of a story
The French factory in Saint-Saulve was directly dependent on German production. It will therefore also be closed, which will lead to the layoff of around a hundred employees. The site had more than 1,000 ten years ago, during the heyday of the oil services industry. This is the end of the story between the small town in the suburbs of Valencienne and Vallourec, which separated from the Ascoval steelworks in 2017.
The Aulnoye-Aymeries site, near Maubeuge (north), is not spared. Vallourec will retain the two factories operating there. However, Philippe Guillemot sets two conditions for the continuation of the activity. First, find new outlets outside of the hydrocarbon market. To achieve this goal, the Bellshill site in Scotland will be closed (70 jobs eliminated) and production returned to Aulnoye. The second condition to be met is the success of a new activity of “additive manufacturing“. One or even more robots will be installed to produce steel parts in small series or custom-made products like a 3D printer.
Vallourec also wants to streamline its R&D department by consolidating its teams in a single location and will therefore cut around a hundred jobs in Aulnoye. But Aulnoye will become the group’s global R&D control center, the CEO promises. In addition, around sixty jobs will be eliminated at the Vallourec headquarters in the Paris region. In all, no fewer than 300 jobs will be cut in France as part of a job protection plan. In the end, 1,300 Vallourec employees will remain in France.
Production for the Middle East will be concentrated in Brazil and locally for North America. The goal of the planNew Vallourecis to lower the break-even point so as not to burn money during lean times. Enough to generate an additional 230 million ebitda (gross operating surplus) in a full year starting in 2024.
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