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GE Confirms Lufkin Foundry Shutdown

Sept. 1, 2015
Texas iron foundry, 262 jobs are casualties of falling demand for oil and gas Part of $3.3-billion purchase Modernization canceled Cites “long-term health” of business
The modernization plan would have established a simpler production process flow, better working conditions, and improved product quality and delivery schedules for the gray and ductile iron foundry.

The GE Oil & Gas division now confirms it will shut down its iron foundry in Lufkin, TX, the same plant it proposed to modernize with a $60-million capital improvement program last November.  A second plant nearby that manufactures oil rig pumps is scheduled to be downsized.

As a result of increasingly challenging market conditions, we have made the decision to close the foundry and reduce positions at Buck Creek (TX). In total, 262 positions will be eliminated across both sites in Angelina County,” according to a statement released by GE Oil & Gas.

GE Oil & Gas is a General Electric business unit manufacturing equipment and supplying technology services for oil-and-gas exploration and production. The foundry is part of the Lufkin Industries business that GE purchased for $3.3 billion in 2013.

The acquisition was part of GE’s strategy to supply oilfield rigs, pumps, and related equipment as part of the GE Oil & Gas business. Lufkin Industries products are used worldwide to extract oil-and-gas products, and are in particular demand for recovering shale oil reserves and “liquids rich” fields.

The Lufkin gray and ductile iron foundry has been operating for more than 100 years. The modernization plan would have involved 72,000 sq.ft. of new space for melting and casting. GE also planned to refurbish the remaining facilities there. It explained that the redesigned operation would have established a simpler production process flow, better working conditions for employees, and improved product quality and delivery schedules.

However, the fast decline in crude oil prices earlier this year prompted a quick reassessment of the modernization plan. GE began to schedule layoffs at Lufkin in the first quarter of 2015. By midyear, regional officials indicated the foundry redevelopment plan had been cancelled.

“This was a tough decision to make, but one we must make for the long-term health of the business,” GE’s official announcement continued. “This is not a reflection of the commitment and hard work of our employees who have worked with dedication and professionalism. We will provide affected employees with resources to help transition to other employment at GE or an outside company. While our footprint in Angelina County is changing, we are committed to being a strong business and community partner.”