Tubacex has opened the adjustment phase in Spain, after reordering its structure in the rest of the world. The seamless tube manufacturer has notified the unions of the implementation of an Employment Regulation File (ERE) for its two plants in Álava, located in Llodio and Amurrio. The measure will mean 150 layoffs, 18.75% of the total workforce at both centers.
With 800 employees in Llodio and Amurrio, Tubacex will also resort to a Temporary Employment Regulation File (ERTE) due to the drop in sales due to the pandemic. The core of the business of the Basque corporation is focused on the oil and gas industry, whose demand had already been reduced by 40%, before the appearance of Covid-19 on the economic scene. The group has diversified into other sectors, such as aeronautics and energy, to reduce this dependence.
The company, whose CEO is Jesús Esmorís, had warned of the difficulty of the situation. Both facilities recorded losses of 18 million in 2020. The pandemic has accelerated the decarbonization process observed in the industry. And it hasn’t given companies time to sign up for the energy transition, according to analysts.
The subsidiaries TTI and Aceralava, based in Llodio and Amurrio, respectively, have the highest level of labor costs in the group, with plants in Italy, Austria, the United States and several countries in Asia. Tubacex announced last year the implementation of a 20% cost reduction plan that meant the elimination of half a thousand jobs out of a total workforce of 2,500 professionals.
To avoid layoffs in the Basque Country, Esmorís proposed “non-traumatic” measures to achieve 10% savings. Among them, the reduction of wages by 9%. Faced with opposition from the unions, according to company sources, an ERE has been used to “not put business continuity at risk.”