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Construction co face more layoffs (30%) 2009

Home Forums Refining Community Refinery News Motiva Port Arthur, Crude Expansion Project Construction co face more layoffs (30%) 2009


Charles Randall

I think some of the cutback in contractors would have happened anyway – given the large amount of work going on at three refineries during the same kind of time frames. A lot of work that needed to be sequential on the units was jammed together because of availability & cost of manpower but regardless of having same manhours on schedule you just cannot throw a lot more people working same hours and expect the work to be as efficient.
When Valero cancled its coker project and delayed/canceled some of the other expansion work – it worked out to a 30% reduction in manpower that was causing some of this log-jam and right now that seems to be on parity with the global overall +500 Oil industry projects right now <See post below on Construction 30% cuts>.
Being able to go unit by unit will help the cost a great deal & allow more work to be done without a full shutdown which will help with the profitability for the company. And while the number of contractors may be smaller they are going to be staying for longer periods of time. And when demand (& overtime cost) on contractors is reduced by these levels it usually results in other projects moving thier projects forward. <ie Total Pt Arthur that has been off in 2011 time frame at end of other 2 projects>. 
I expect to see some of the funds from canceled projects to go toward funding the next round of consolidation / mergers in oil patch. Rumor already has ExxonMobil on prowl & looking at Petrobras for JV’s.
Now here is article I mentioned:

Business Examiner by Steve Dunkelberger Jan. 12, 2009
Construction companies face more layoffs in 2009

An estimated two-thirds of the nation’s non-residential construction companies are planning to cut their payrolls, according to new employment and business forecast figures released by the Associated General Contractors of America. All told, those layoffs are forecast to result in a 30 percent decline in the number of people working on construction projects.
“Unless the business climate changes significantly and soon, the construction sector will continue to experience the kind of devastating job losses and crippling declines in business activity that will undermine efforts to end the recession,” Stephen Sandherr, the association’s chief executive officer said.

The forecast results, which are based on a survey conducted by the construction association late in 2008, found no relief in sight for construction companies that already have been among the hardest hit by the economic slowdown. Many construction companies experienced significant slowdowns beginning late last year, resulting in a 10 percent decline in the number of construction workers since 2006, Sandherr noted.
The forecast did find, however, that planned investments in infrastructure projects as part of the stimulus package is likely to dramatically improve the employment and business outlook for the year. For example, 85 percent of non-residential construction companies would either cancel layoffs or add new employees if states embarked on stimulus-funded infrastructure projects.
“With a stimulus, construction companies can get more people to work and more money into the economy in a way that will immediately boost our economy,” Sandherr said.  “Without a stimulus, construction companies will cut jobs, slash spending and continue to be among the hardest hit sectors within our economy.”

Posted in BE Daily, Building, Law and Legislation, Manufacturing/Trade/Transportation, Workforce by Steve Dunkelberger

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