BREWER, Maine — Cianbro Corp. cut 110 workers from its Eastern Manufacturing Facility in South Brewer on Friday due to the recent drop in demand for oil, which has slowed the schedule of the massive oil refinery expansion in Texas that employees are working on.
A third of them will be laid off “for the short term,” and the others will get jobs on other Cianbro projects, Peter A. “Andi” Vigue, president and chief operating officer of Cianbro Corp., said during a quick stop in Bangor on Friday.
“This is simply due to the economy,” he said. “Everybody knows that last summer fuel was at an all-time high. … Now the price of fuel and the demand for fuel is much lower.”
There are projects in the works in northern and central Maine that should result in the rehiring of the 35 workers being laid off, Vigue said.
“I believe by spring, we won’t have enough people” to do all the projects, he said. “We see this as a short-term thing.”
Of the 110 employees cut from the Brewer site, “we can redeploy 75 people to other projects, but 35 people we weren’t able to redeploy, so that’s where the layoff comes from,” Alan Burton, Cianbro’s vice president of human resources, safety and health, said Friday.
Those redeployed will be given positions at “various jobs throughout Cianbro, some as far as West Virginia,” Vigue said. “Some are right here in the Bangor area.”
The workers let go are from “all over the board,” Burton said, listing ironworkers, pipe fitters and “also some management team members.”
Motiva Enterprises LLC hired Cianbro to build 52 refinery modules for the Motiva Port Arthur Refinery in Texas, which is in the middle of a $7 billion expansion that will make it the largest crude oil processing plant in North America.
The contract with Motiva has not changed, but the timetable has, Vigue said.
“We originally planned to ship the last module in late 2009. Now it will be 2010,” he said.
Workers in Brewer are building “catalytic-cracker-feed hydrotreater and hydrocracker units” for the massive refinery expansion project and have a dozen modules under way.
The refinery modules are heavy-duty industrial steel frames filled with pipes, pumps and electronics, and the first four are expected to be shipped by barge in March, Burton said.
“They don’t really need them [in Texas] until the mid-March date,” he said. “After that, you’ll see on a fairly regular basis shipments going out on a monthly to six-week schedule.”
Cianbro chose the site of the shuttered Eastern Fine Paper Co. mill, which closed in January 2004, for its Eastern Manufacturing Facility and spent 10 months changing the abandoned mill site into a module-producing facility providing an estimated 500 jobs that pay well.
Work on the modules began in April and Motiva asked Cianbro to work on an accelerated schedule, which meant additional temporary people were hired, making the total employed near 700, and employees were given a lot of overtime. That changed when the trickledown effect from the drop in demand for oil started to affect the oil industry at the end of 2008, resulting in the elimination of overtime in Brewer and the release of part-time employees.
After the Friday cuts, Cianbro will have about 410 people working in Brewer, plus about 20 subcontractors, Burton said.
“We actually get right back to the levels we were at before the ramp-up,” he said.
Four module plants, three in the United States and one in Mexico, are building pieces for the Port Arthur expansion, which is the largest capital project ever undertaken in Texas, and all four have been ordered to cut back, Burton said.
The Texas refinery, which produces Shell Oil brand products, processes about 275,000 barrels of fuel a day and will process about 600,000 barrels a day once the expansion is complete, which is expected in 2010 or 2011.
Vigue’s father, Peter G. Vigue, chairman of the board of directors, president and chief executive officer for Pittsfield-based Cianbro Cos., said he’s confident that those who lost their jobs Friday will soon be back at work.
“Our company has just finalized a deal for work in the northern half of Maine which will create 50 new construction jobs,” he said in a statement Friday. “We also have the springtime backlog of projects which are scheduled to get under way beginning in late March. That work will require new hiring.”
In addition, the laid-off workers will continue to receive company benefits for up to eight weeks, he said.
“We are confident that those team members who are displaced by this recessionary hiccup will have new opportunities within Cianbro in the future,” he said.
Andi Vigue stressed that in business, changes in scheduling and timetables are commonplace.
“This is pretty insignificant in terms of numbers, but pretty significant to the people involved,” he said.