OLEAN, N.Y. — More than 100 years of heavy manufacturing will come to a close in North Olean, with Siemens Energy officials reporting more than 500 employees will be affected by moving production to other facilities in the next year.
Of the affected employees — who were notified of the changes at a town hall-style meeting Tuesday — company officials told the Times Herald around 100 jobs will be transferred to the Painted Post facility, while around 430 will be laid off. Of the jobs affected, around 485 are manufacturing positions. The separations and transfers are to be phased in through mid-2022, a roughly 18-month period.
Officials also reported around 360 jobs will remain in Olean — primarily engineering, project management, and research and development efforts. Of the employees remaining, around 75 are connected to the steam turbine business that transferred to Olean after Curtiss-Wright purchased and closed the Wellsville facility.
Christian Bruch, CEO of the German company, told reporters during a first quarter financials conference call Tuesday that 7,800 layoffs around the world will be part of an effort to make the company more competitive in its Power and Gas division — with 1,700 in the U.S. and another 3,000 in Germany.
“We also want to standardize and modularize our production processes and simplify internal processes and structures as much as possible. Part of the planned measures, however, will also require a further reduction of jobs,” he said, noting that 20% of an expected $360 million reduction in overhead will come from layoffs. “This is a very painful decision into areas which have supported our core business for a very long time in the past.”
Few, if any, facilities are expected to entirely shutter due to the changes.
“We want to avoid closing locations,” he said. “Nevertheless, one thing is clear — change is necessary, and the pace of change in the energy markets have, if anything, accelerated over the past 12 months.”
Of the workers to be laid off, 3,000 — almost half — are in Germany. The company employs around 67,000 people globally in its Power and Gas division — down from around 88,000 in 2019.
The Olean facility currently employs around 860 workers, while the Painted Post facility employs around 350.
The first layoffs are not expected in the next few months, and company officials said they will take place in phases.
To date, no Workforce Adjustment and Retraining Notifications have been issued by the state Department of Labor. Under the WARN Act, private businesses with 50 or more full-time workers to issue a notice with at least 90 days’ notice of closings, mass layoffs of 250 workers or one-third of the workforce of a site, and other relocations and reductions in work hours. Businesses that do not provide the notices may be required to pay back wages and benefits to workers, and face civil penalties.
Rumors of closings and consolidations nationally and locally had been reported over the past months, possibly indicating how long such consolidations have been under review.
In August, website Oil & Gas 360, a publication of Denver-based consulting firm EnerCom Inc., reported that an anonymous source said Siemens Energy would close an unknown number of plants worldwide to increase profit margins for the new company. German conglomerate Siemens AG spun off its energy business in September, with the parent company holding on to a minority share of stock.
More recently, rumors in the Olean area circulated that were very close to what was announced Tuesday, but company officials reported last week that the final decisions had not been made at that point.
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 with Ingersoll Rand, which owned a compressor manufacturing plant in Painted Post. Siemens bought Dresser-Rand in 2015 for $7.8 billion. Siemens Energy was spun off in 2020 from the main company.
At the time of the sale to Siemens, more than 1,100 workers were employed at the facility. Several layoffs in 2015, 2016 and 2017 brought that number to 950.
The workers that remain will be primarily those using the technology center built in 2009 at a cost of $14.8 million — which was built with a $2 million grant from Empire State Development.
CITY OFFICIALS agreed that an effort is needed to keep the campus occupied — either by Siemens Energy or another concern.
“I’m sick to my stomach over this,” Olean Mayor Bill Aiello told the Times Herald on Tuesday afternoon. “Our fears have been answered.
“There’s so many things to consider here on how this will affect Olean,” the mayor added, noting that in addition to the immediate unemployment, concerns over population loss, revenue for city operations, the effect on businesses that serve Siemens Energy employees are also on his mind.
Aiello said that after speaking with Siemens and government officials, he believes the layoffs are “a done deal … but we’ll fight tooth and nail to see what we can do here.”
Aiello said that during his discussions Tuesday with company officials, they indicated “they will probably start to sell off the property.”
“We’ll have to see what we can do about bringing in other industry,” he added
During a meeting of the Common Council’s strategic planning committee Tuesday evening, council President John Crawford, D-Ward 5 — who worked at the site for more than six years — urged aldermen and residents to contact state and federal officials.
“I teach business management, I know how decisions are made — I get it,” he said. “But it doesn’t mean we have to take it and like it…. Our job is to be the squeaky wheel.
“I can’t imagine they’d just mothball a multimillion-dollar facility,” he said, adding that Olean has much to offer between a skilled workforce, a facility that could be adapted to new uses, and efforts to improve the quality of life. “We’ve got so many good things going on with our revitalization, and this just hurts.”
Alderman Linda Witte, D-Ward 1, said that a package had been assembled by state officials when Dal-Tile announced it would move out of Olean in 2012, but the decision was made to move the work to a non-union shop in Pennsylvania. Such action, she said, means that expectations need to be tempered.
“In their minds, it’s business — but in our minds, it’s our community,” she said, supporting Crawford’s effort. “We have to show them we’re willing to roll up our sleeves… but we also have to be realistic.”
“I think it’s important we don’t give a sense of false hope,” said Paul Gonzalez, D-Ward 3 — who previously worked at the site for nine years for Dresser-Rand and Siemens — adding that with efforts likely made by Olean-favoring management, the decision is unlikely to be reversed. “This is devastating beyond words.”
Jason Panus, R-Ward 2, said that the push should not just be toward keeping the site, and needs to also include retraining programs and more investment for whatever firm may end up at the site.
“We need new development in jobs here anyway,” Panus said. “We need to push the people who make the deals … they’re going to have to provide that incentive to start up.”
