OLEAN — Around 25 jobs will leave the Dresser-Rand plant for Texas and other Siemens-owned facilities, company officials confirmed to the Times Herald.
“As we continue to navigate a challenging global energy market, there is a business need to consolidate some office functions in Olean elsewhere in Siemens’ existing U.S. footprint,” the company said in a statement. “Employees affected by this very difficult decision have been offered the opportunity to relocate.
“We appreciate the dedication and professionalism of our workers as we continue to position the business for long-term growth. This action is expected to affect about 25 positions.”
The employees work in administration, and the layoffs do not affect line workers.
The downturn in business has been linked to oil and gas prices, which have fallen below all-time highs in the last decade or so.
Oil prices peaked at $155.92 a barrel in June 2008, but had dropped to under $30 a barrel in January 2016. Oil prices on Tuesday were at $52.40 a barrel. Henry Hub gas prices per 1 million BTU were as high as $14.81 in September 2005, but hit a low of $1.57 in March 2016. The April 10 spot price was $3.15 per 1 million BTU.
The Dresser-Rand business has a long history in the Southern Tier.
Clark Bros., founded in 1880 in Belmont to build pumps for the explosion in Southern Tier oil development, moved to Olean in 1912. The firm merged with Solomon R. Dresser Co. — originally of Bradford, Pa. — in 1938 to form Dresser-Clark, which was later Dresser Industries. Dresser-Rand was formed in 1986 in a joint venture of Dresser Industries and Ingersoll Rand, which owned a compressor manufacturing plant in Painted Post. In an all-cash deal with no conditions in 2015, Siemens, a Germany-based energy conglomerate, bought Dresser-Rand for $7.8 billion and assumed all of the company’s debts.
The Dresser-Rand business of Siemens, headquartered in Houston, produces and designs compressors and turbines used in the oil and gas industry. The company is one of the largest employers in the region. Its operations in Olean, Wellsville and Painted Post have a combined workforce of 2,220 as of 2016 — with around half working in Olean.
Since the purchase, several layoffs have been reported.
In September 2015, Siemens let go of around 25 union workers, with about 50 more laid off through the end of the year. In January 2016, officials announced around 25 non-union workers in Olean were laid off. In June, around 60 layoffs were reported at the Wellsville facility, and 96 were let go in January. Siemens officials announced in June that the Wellsville plant had around 525 employees.
The first quarter financial report released Jan. 31 said revenue increased 1 percent to 19.1 billion euros, while orders were down 14 percent to 19.6 billion euros. Net income rose 25 percent to 1.9 billion euros, officials reported.
In the Power and Gas division, orders fell 40 percent to 3.31 billion euros, while revenues increased 6 percent to 3.9 billion euros and profits increased 31 percent to 458 million euros. Officials noted in the report that “substantial decline in the Americas” and “reduced new-unit business in an unfavorable market environment” were some of the factors in declining sales.
(Contact reporter-editor Bob Clark at firstname.lastname@example.org. Follow him on Twitter, @OTHBob)