OLEAN, N.Y. — The same day news broke that millions of dollars in federal funding would benefit area Dresser-Rand facilities, nearly two dozen union employees in the Olean plant’s manufacturing shop learned they were losing their jobs, a union representative said.
“It’s mind-boggling,” said John Baglione, president of the United Steelworkers Union Local 4601 which represents 520 workers at the Olean plant. “It’s amazing that the day we find out (Dresser-Rand) is getting a $4 million grant, 21 of our union members got layoff slips. The company is contemplating laying off between eight and 10 more people.”
The Times Herald was unsuccessful in attempts to reach Christopher Rossi, Dresser-Rand’s new president and CEO, for comment on the matter and was directed to Blaise Derrico, a Dresser-Rand spokesperson.
When contacted early Wednesday afternoon, Derrico he was unaware of any layoffs but would look into the matter.
No employees were laid off at Dresser-Rand’s Wellsville facility, said Ron Warner, who represents International Association of Machinists (IAM) and Aerospace Workers Local Lodge 1580 union workers at the plant.
The Times Herald was unable to reach Terry Schoonover, president of the union at Dresser-Rand’s operation in Painted Post.
During discussions with Dresser-Rand officials regarding the workforce reduction, Baglione said he was told the layoffs are tied to a reduced demand in orders.
“This layoff is just the beginning,” Baglione said. “We have very few new orders due to the reduced prices of oil. We have nothing really coming in before the end of the first quarter, so what we got is what we got and when it’s gone it’s not being replenished.”
Baglione said company officials told him every 30 days they will re-evaluate the workload against the required workforce, which could result in more layoffs.
Outsourcing also plays a key role in the layoffs, the union president speculated.
“I wish that I had the work that this company had that is being shipped off to China. It’s being sent over there for costs. If I had those jobs, we’d be hiring here,” Baglione said. “We’re losing jobs and it’s going to China. Everything is being decided because of the almighty dollar.”
Baglione said he’s already filed grievances with the company in protest of the layoffs and has reached out to New York state Sen. Catharine Young, R-Olean, and U.S. Sen. Charles Schumer, D-N.Y.
On Tuesday, Schumer announced Dresser-Rand is getting $4 million from the U.S. Department of Energy (DOE) to design and test pilot-scale supersonic carbon dioxide compressors.
The senator touted the funding as “great news” for Dresser-Rand’s operations in Olean, Wellsville and Painted Post — particularly for the Olean plant — as the grant could mean “… more jobs and a stronger manufacturing industry in upstate New York.”
“The $4 million federal grant is very welcome news because it could translate into new manufacturing opportunities in the Olean plant, but the layoffs are a cause for deep concern,” said Young in a statement. “I have been reaching out to stakeholders since the news of the Dresser-Rand sale broke, and I will continue to have the retention of our jobs as my highest priority. State, federal and local officials are eager to work with Siemens to strengthen all three of the New York manufacturing facilities.”
Dresser-Rand, 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 — with around half working in Olean.
At the end of June, European authorities approved Siemens AG’s purchase of Dresser-Rand.
In an all-cash deal with no conditions, Siemens, a Germany-based energy conglomerate, bought Dresser-Rand for $7.8 billion and assumed all of the company’s debts. The purchase represents Siemens’ foray into the domestic oil and gas industry.
As of Wednesday afternoon, Baglione said he has yet to speak to any Siemens’ representative about the layoffs or the direction the company is headed.
“We’re basically in the dark,” he said.
Earlier this year, Vince Volpe, the immediate past president and CEO of Dresser-Rand, announced the company would cut 8 percent of its global workforce, or about 650 employees.
The workforce reduction, Volpe said in March, was directly related to market conditions in the energy industry, stemming primarily from the drop in oil prices, and not Siemens’ acquisition of Dresser-Rand.
World oil prices have plummeted from $91.44 a year ago to $45.74 per barrel as of Wednesday.
During its last fiscal year, Dresser-Rand generated revenue of around $2.8 billion in fiscal 2014. Siemens is anticipating annual synergies of about $200 million from the integration of Dresser-Rand by 2019.
According to Siemens’ third quarter filing posted on July 30, the company reported its net income was $1.4 billion.
