Infotech Tube manufacturer Vallourec announces the elimination of 1,050 jobs, including 350 in France

Tube manufacturer Vallourec announces the elimination of 1,050 jobs, including 350 in France

More than a thousand jobs eliminated, including 350 in France where a plant in Seine-Maritime will be closed: the industrialist Vallourec, still heavily penalized by the pandemic and in debt, announced on Wednesday November 18 a new series of measures to strengthen its competitiveness.

Vallourec, a French specialist in seamless tubes and dependent on a hydrocarbon market which has contracted sharply since the start of the health crisis, had already announced in the first half of the year the elimination of 900 jobs in North America, i.e. a third staff in the area.

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Now, it plans to cut 1,050 more jobs, out of nearly 19,000 employees around the world.

For France, the restructuring plan provides for the elimination of 350 jobs, particularly on production units, including the closure of the Déville-les-Rouen (Seine-Maritime) plant.

A “huge mess”

“It’s a real shock for our territory”, said in a statement the deputy (LREM) of the department, Damien Adam, evoking “Nearly 190 employees” thus concerned and saying he is determined to ” do everything “ so that the site “Finds an activity with an industrial vocation taking up a maximum of jobs”.

“The disappearance of the company weakens the industrial ecosystem of the Metropolis a little more” of Rouen, lamented the LREM president of the departmental council, Bertrand Bellanger, while the PS mayor of Rouen and president of the Rouen Normandy metropolis, Nicolas Mayer-Rossignol, expressed his “Anger” facing a “Huge mess”, claiming that “These announcements constitute a major industrial shock for our Metropolis, which cannot remain unanswered”.

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Elected officials from the Hauts-de-France region and several municipalities where Vallourec is present also reacted to express their vigilance “On jobs at the industrial sites of Aulnoye-Aymeries, Saint-Saulve, as well as the support site of Valenciennes”.

In Germany, the group is counting on 200 fewer jobs and reduced working hours. Finally, in Brazil, 500 positions will be eliminated in support functions.

636 million euros loss

These measures follow a third quarter which saw the group’s turnover fall by a third, to 716 million euros, while the net loss widened slightly to 69 million euros (from 60 million a year ago).

Results “In line with our expectations”, commented the chairman of the management board Edouard Guinotte, insisting on the “Resistance capacity” from Vallourec. The group thus announced the renewal for five years of its framework contract with Total, following the extension in July of the partnership with Petrobras.

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But the very sharp drop in demand on the Oil and Gas market, particularly in North America, and the decline in activity in industrial sectors in Europe, were only partially offset by a good quarter in Brazil. In total, deliveries were almost halved over one year, to 319,000 tonnes. And the economic context remains “Very uncertain”, underlined Edouard Guinotte.

However, the group maintained its financial outlook for fiscal year 2020. Over the first nine months, sales fell by a quarter to 2.4 billion euros and the group recorded a net loss of 636 million (against 227 for the same period of 2019).

In this context of activity severely penalized by the health crisis, which slowed down economies and reduced demand for hydrocarbons, Vallourec began negotiations this fall with its creditors to restructure its debt, which stood at 3.5 billion. euros at the end of September.

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On Tuesday, the group said it was aiming to reduce its debt by just over 50% through a capital conversion, thus diluting current shareholders, as the company’s stock price plummeted. by 98% in ten years.

“Negotiations with creditors are just starting”, said Edouard Guinotte, who wants to succeed ” as soon as possible “, and in any case before February 2021, the date of the maturity of credit lines in the amount of 1.7 billion euros.

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