Fluor Subsidiary, Doe Run Co., Plans Cutback, Layoffs

The Doe Run Co., a subsidiary of Fluor Corp. and North America’s largest producer of refined lead, announced Monday that it would curtail production by 25% and lay off 260 employees--one-fourth of its work force--in response to slumping worldwide lead prices.

The St. Louis-based company said it will immediately shut down two of its six mines in south central Missouri and will temporarily close one of two furnaces at its Herculaneum, Mo., smelter, reducing production from a projected 235,000 tons this year to 175,000 tons.

Workers will receive severance pay and help in finding new jobs, the company said.

Fluor completed its $125-million purchase of Doe Run last year. The Irvine engineering and construction firm said ongoing weakness in the international lead market was partly to blame for decreased earnings of $25.8 million for its latest quarter ended Jan. 31, down 8.5% from the previous year.

A year ago, refined lead sold for 48.18 cents per pound on the London Metal Exchange. The average March price was just 27.43 cents per pound, however, and LME lead metal inventories averaged 70,000 tons in March, 1991, up from 15,000 tons a year earlier.

Car battery manufacturers are the biggest market for refined lead, but, along with other major consumer products, car sales have suffered during the recession.

Doe Run President Jeffrey L. Zelms said in a statement that the company is well-positioned to respond when market conditions improve.

“Doe Run’s long-term strategy is to remain the market leader by lowering production costs and matching lead production with lead market demand,” Zelms said.

Doe Run accounts for less than 5% of Fluor’s total revenue.