National Supply Will Shut Plant, Lay Off 150
A Houston-based oil company said Monday that it will close its second and last Southern California manufacturing plant because plummeting oil prices have prompted the oil industry to quit ordering new equipment.
About 150 employees at the Los Nietos factory of National Supply Co. will be gradually laid off between now and the closing in early 1987, the company said. The plant, which opened in the 1930s, makes pumps used to remove fluids from oil wells.
David A. Higbee, a vice president of National Supply, said work from the Los Nietos plant will be consolidated at a newer, smaller plant at San Marcos, Tex., that employs 90. Both have been operating at about 25% of capacity, he said.
“The level of business out there just isn’t enough to support the plant,” said Jerry Marx, a spokesman for National Supply.
In early 1985, National Supply, a subsidiary of Armco Inc., closed a factory in Torrance that made drilling equipment. By the time it closed, employment had dwindled to about 230 from 1,000. National Supply is one of thousands of oil supply firms damaged by the recent nose-dive in oil prices. Most of its products are related to drilling, which has fallen to its lowest level since World War II.
Marx said the company has closed several other manufacturing plants and about 25 oil supply stores since 1981, a period in which revenue plunged to $530 million from $2 billion. It retains 70 stores and factories in Texas, Canada, England, Northern Ireland, Scotland and Venezuela.
Economists say cutbacks in drilling and other oil-field spending have taken their toll on California’s economy, offsetting many of the positive effects of lower energy prices.
Despite the volatility of oil prices, Marx said National Supply doesn’t expect a major increase in oil prices before the scheduled plant closing early next year. Between now and then, equipment and orders will gradually be transferred to the Texas plant.
The plant was originally built by California Fishing Tool Co. and later became part of Fluid Packed Pump Co., which was bought by National Supply in 1958.
