SHREVEPORT, La. -- The virus crisis and the oil crash combine for big layoffs at Benteler Steel.
The manufacturer has notified the Louisiana Workforce Commission that it will let 375 workers go, effective July 1. That's more than half of the company's workforce at their facility at the Port of Caddo-Bossier, which is thought to be 530, according to Port Director Eric England.
Benteler's steel tubing made at the port is used in the oil and gas industry.
That industry has taken a severe downturn amid the COVID-19 economic shutdown with reduced demand for oil, plus an overseas price war that raised supply brim full.
Benteler calls the layoffs temporary. Its Chief Operating Officer, Christian Wiethuchter, said in a statement that the layoffs are "unavoidable."
He went on to say that "production of OCTG pipes has declined significantly. It is expected that production will remain at the lower rate through the rest of the year.
"Our goal is to return to full production as soon as the market recovers," Wiethuchter concluded.
David Hoaas, Centenary Economics Professor, explained, "What they feel is the first of July they're going to have an inventory of products ready to supply those people who want to buy their products. And they're not going to need to produce more until the situation changes."
Financial website 24-7 Wall Street indexed the pandemic's economic impact for every state, and the results look bleak for Louisiana. It's based on numbers of coronavirus cases, employment lost in high-risk industries, unemployment claims, and unemployment projections.
They project that Louisiana is in the third worst shape in the U.S, and the worst in the south. They also project a statewide unemployment rate of 18 percent by July, which would be the second highest for any state.
"If someone doesn't have the resources to go to the store and continue their purchasing the way they were before, those individuals that supply goods and services that people are buying aren't going to have a revenue stream coming in," Hoaas also explained. "At some point there's a secondary and a tertiary effect that's going to hit those supply businesses as well."
The 10-parish region of northwest Louisiana had seen a downward trend in weekly first time unemployment claims since a big spike in early April. Data from the Louisiana Workforce Commission shows the region went from 10,408 initial claims for the week ending April 4, to 4,135 for the week ending May 9.