Business

New Pipe Mill Near Houston Promises American ‘Manufacturing Revival’

TenarisBayCity creates more than 600 skilled manufacturing jobs

A large new steel pipe mill has opened in Bay City, about 75 miles southwest of Houston. It’s bringing with it more than 600 permanent jobs, and the company, Tenaris, is promising a return of manufacturing jobs in America.

But the question is, in an age where more and more work is done by computers and robots, what kinds of jobs are they?

On the day of its official opening, Dec. 11, Tenaris’ U.S. engineering director Alex Corra gave us a tour.

From an elevated hallway, separated by glass walls from the enormous production floor below, you can see the 25 to 40 foot long sections of drilling pipe they make here. They come into sight as red-hot bars, whose heat you can feel even from 30 feet away and through the windows.

“Depending (on) the diameter and the thickness, we can do four pipes or two pipes with one bar,” Corra said.

The machine will eventually produce a bar every 40 seconds, he said. That will amount to 600,000 tons of pipe per year; they will be used for drilling and other oil and gas related purposes.

The community has been eagerly awaiting the mill’s opening since it was announced in February 2013. Last week’s opening ceremony featured Texas Gov. Greg Abbott and U.S. Secretary of Energy Rick Perry. Abbott praised the plant as a job creator, especially after Hurricane Harvey.

“One of the best ways for us to recover and rebuild from a challenge like that is with a great company like Tenaris coming here, opening this fabulous facility and creating hundreds of new jobs,” he said.

And both Abbott and Perry spoke about a “manufacturing revival.”

“It’s my hope and my expectation that this company will continue to play a role in our American energy revolution and manufacturing revival,” Perry said.

Again, the plant is employing more than 600 people. Tenaris CEO Paolo Rocca said they are all manufacturing jobs, “in the sense that manufacturing is today, which is basically control of complex automation and many of these jobs are highly skilled.”

The jobs pay well. The average salary is $66,000 a year.

So more money but fewer jobs than a plant this size would have created, say, 20 years ago.

Ed Egan, director of the McNair Center for Entrepreneurship at Rice University, said for modern standards, 600 jobs is a lot for a manufacturing facility, but it would have been at least 10 times more in the past.

“It’s not jobs that matter, it’s productive jobs,” he said. “We’ve got to be productive. We need to be as efficient as we can be. So we do need to upskill, but as we need to train people, we need to train business owners and we need to work out how to do both sides, the supply and demand of this labor market, to get things going in manufacturing here in Texas.”

So it’s not so much about creating jobs but training the workforce.

“There is a growing number of jobs available and at the same time, we are unable to fill all of the skilled manufacturing jobs because folks are not trained as yet to fill those jobs,” Tony Bennett, president of the Texas Association of Manufacturers, said.

For its part, Tenaris is training its workforce on the Bay City campus. It’s also partnering with community colleges that teach manufacturing skills.

But is it really part of a manufacturing revival as it promises?

Egan said not in terms of new jobs.

“Tenaris then laid off 500 employees in 2015 at three U.S. plants, including 230 jobs in the Houston area and is now moving jobs from Houston to Bay City,” the professor said. “So net-net we’re pretty much back where we started on this one.”

He notes that Tenaris could have chosen Louisiana over Texas, so that’s a plus for the state. It helped that Texas gave the company a $6 million grant from its enterprise fund. That on top of other local tax incentives.

Egan said it will have a positive economic impact on the region. The company said it also picked Bay City for its proximity to major drill sites and the support it’s getting from the locals.

Disclosure: Tenaris is a supporter of public radio via National Public Media.

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Florian Martin

Florian Martin

Business Reporter

Florian Martin is currently the News 88.7 business reporter. Florian’s stories can frequently be heard on other public radio stations throughout Texas and on NPR nationwide. Some of them have earned him awards from Texas AP Broadcasters and the Houston Press Club. Florian is a native of Germany. His studies...

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