August 26th, 2011
Butler Manufacturing lays off 64 workers

STAFF REPORT

Sixty-four people will lose their jobs at Butler Manufacturing in San Marcos by Oct. 24.

BlueScope Buildings North America, the parent company, announced the manufacturing position layoffs this week. Sixteen manufacturing positions will remain at the San Marcos site, as will about 35 employees who work in engineering, customer service and sales, BlueScope’s San Marcos-based Southwest Regional General Manager Mike Bruns said on Wednesday. The San Marcos facility makes components for prefabricated steel buildings.

“This decision was made (to eliminate 64 positions) in order to align frame production capacity with the actual demands of the marketplace,” Bruns said. “This was a difficult decision because we know that our hardworking employees, their families and the community will be affected. We recognize the dedication, service, and commitment of our employees.”

BlueScope, in an official statement, said the reduction in force was necessary to insure its continued presence in San Marcos. Bruns said the reductions will make BlueScope more competitive and put it in a better position to endure the economic downturn, though he said the company tried to avoid the layoffs.

The statement issued by the company characterized the situation as a temporary idling of frame production. Bruns said there are no plans to re-hire all 64 people.

“It’s hard to say, based on the economy, what will happen in the future,” Bruns told the San Marcos Mercury. “I can tell you that there are no immediate plans to bring it to the level it’s at now. It just depends on the economy.”

BlueScope, based in Australia, on Monday reported a net loss after tax of 1.054 billion Australian (about $1.1 billion in U.S. dollars) for fiscal year 2011. BlueScope also announced about 1,000 layoffs of its Australian workers, though it said the actual amount will depend on further discussions with employees and unions. The company announced no layoffs in the U.S.

Bruns said BlueScope’s announcement on Monday of lost profits and layoffs is unrelated to the 64 layoffs in San Marcos.

BlueScope Managing Director and CEO Paul O’Malley said the company is experiencing an unprecedented combination of economic challenges in the form of a record-high Australian dollar, low steel prices, and high raw materials costs. O’Malley said these are compounded by low domestic steel demand resulting from the global financial crisis.

BlueScope owns companies in Asia, Australia, New Zealand, and the U.S. Along with Metl-Span, ASC Profiles, and Steelscape, BlueScope Buildings North America is one of four BlueScope Steel businesses that focus entirely on the building and construction market in North America.

O’Malley said all the businesses except those in Australia are doing well.

O’Malley said one group of the company’s North American businesses made $72 million in earnings before interest and tax in FY 2011, while another group lost $20 million. O’Malley said the U.S. building business “continues to remain subdued, given the state of the U.S. economy.”

O’Malley said BlueScope’s Asia businesses contributed $108 million in earnings before interest and tax, and its New Zealand business contributed $82 million.

O’Malley said BlueScope’s Australian businesses “delivered a poor result in FY 2011.” He said one group of the company’s Australian businesses lost $258 million in earnings before interest and tax, and he said another group there continued to under-perform with a $34 million loss.