There is no crystal ball to predict when orders will begin to flow again for the Turner Industries pipe fabrication plant in Paris, but both local company officials and those at its headquarters in Baton Rouge, Louisiana, are cautiously optimistic work will return.
The company, plagued in April by a drop in orders for its largest pipe fabrication plant, announced a large-scale layoff of about 500 workers in June, but was able to return roughly 320 of those workers in July when the company received an order from a new client.
That contract is now coming to an end, again forcing a layoff as Chris Bailey, vice president pipe fabrication division Paris operations, announced Friday. Unless something changes, layoffs will come in two waves, one as early as Dec. 11 and another in mid-January.
“We are cautiously optimistic in estimating and searching for new work in the coming months,” Bailey said Friday. “We believe these layoffs are temporary and have every intention to resume normal operations. If work increases before the Dec. 11 date, we might not have to conduct some of these layoffs.”
Earlier in the week, Bailey said the company was upfront and honest with employees as they returned to work in July.
“We told them we have one project, and this is all we can offer,” Bailey said. “And our people came back, and they said, ‘We understand, and we’re thankful; and we’ll keep praying that we’ll get some more work.’”
At a Paris News request for information about the company’s long-range plans for the local plant, Turner Executive Vice President Warren Landry, General Manager of the company’s Pipe Fabrication Division, and Turner Industries’ Chief Operating Officer David Franks, along with Bailey, sat down Tuesday with Paris News Publisher Relan Walker and a reporter.
At the time, company officials said to expect layoffs to be announced soon unless another job is found. This was confirmed with issuance of letters to Turner’s employees on Thursday, announcing the potential layoffs.
“We thought we were going to be able to tell you we had gotten additional work,” Landry said Tuesday. “However, that customer decision has been postponed.”
In April, Turner Industries felt the effects of an economic downturn caused by a drop in oil prices, customer spending and the global coronavirus pandemic. In late October, those effects are still being encountered. The effects of an unprecedented hurricane season on many of the firm’s clients along the Gulf Coast have added to the company’s challenges.
“So, what we have is an odd market that was already burdened. Add a global pandemic and an election year,” Franks said. “I don’t like to use the cliché ‘a perfect storm’ but it really has shaped up and added so much uncertainty. There are projects out there that are going to be built, we just can’t tell you when they’re going to be built — whether in the first half of next year, the second half of next year, or into 2022.”
Meanwhile, the company is aggressively scouring the industries it serves — refining, nuclear power, petrochemical, chemical, large manufacturing, etc. Of the company’s four divisions — pipe fabrication, construction, maintenance/turnarounds and equipment/specialty services — pipe fabrication is an early indicator of the success of the other divisions.
”Pipe fabrication is our leading edge,” Franks added, “because the pipe is designed and fabricated, and then our construction division builds facilities. We then position ourselves to perform maintenance for those facilities over time.”
The company has five fabrication plants, with one in Corpus Christi temporarily closed. Landry explained the process used to determine where to send projects.
“There are many factors — customer location, its niche and who has capacity,” Landry said, noting that as the company’s largest fabrication facility, Paris offers large scale capacity which allows it to manage customer demand. Landry adds, “If the customer says, ‘My schedule is critical, and based on that, we need to know you can deliver when you say you’re going to deliver.’ Our Paris fabrication facility has successfully delivered when customers have asked this question.”
Many plants are currently spending money on small, quick-turn maintenance type jobs. “The Paris facility is not located in an industrial belt; so, when a customer requires a short turnaround for a small order, most want a fabricator in close proximity,” Landry explained.
“Right now, a number of requests for quotations on smaller projects are being received in the Baton Rouge corporate office,” Bailey said. “Because of Paris’ location, if you’re going to successfully bid these projects, freight is a factor in responding to customer requests.”
In the long term, however, the company looks to the Paris plant because of its capacity and its skilled and dedicated workforce.
“Paris has scale,” Franks said. “It’s the largest shop we have, which lends itself to the larger projects. That’s what it’s geared to do. I am not saying it can’t do the smaller quick-turn maintenance work, and we are evaluating if there is anything else that we can build in this facility in the meantime and until it resumes normal operations.”
Looking at Turner’s history in Paris, Landry emphasized the cyclical nature of its business, noting the company navigated a challenging year in 2003, a banner year in 2015 and had to lay off some people in 2016. On average, the company has employed more than 550 people over a 20-year period. Through it all, Franks added, the company and its employees continued their commitment to communities in and around Paris, including United Way contributions and support.
“We have a lot of blood, sweat and tears in the form of our employees’ commitment to the right safety culture, work processes, and focus on quality,” Landry said. “We have a great workforce here. So, we must be strategic such that when business does roll, we can be ready to roll.”
Franks agreed as he explained plans are to keep strategic employees in place during the layoff.
“We want to keep our operations running in Paris because it is important to our long-term success. It is extremely difficult to start a shop back up from the ground floor. We believe that the dip is shallow enough right now that it makes more sense to stay with a platform that can respond very quickly, which is hopefully going to produce new work orders.”
During an almost hour-long interview, the three company officials repeatedly emphasized a desire to be transparent and honest about what faces Turner Industries and the Paris plant in particular.
“We are being transparent both about what we see and what we don’t see,” Franks reiterated.