The Daily Californian Online

Economy Forces 'Dramatic' Layoffs at Steel Plant

By Chris Carrassi
Contributing Writer
Thursday, July 23, 2009
Category: News > City > Business

Confronting the effects of the economic crisis, West Berkeley's Pacific Steel Casting company is laying off half of its workers as job openings and public resources in the Bay Area dwindle.

The steel foundry, which has been employing Berkeley residents for 75 years, is in the process of laying off about 300 of its 600 workers. Several hundred employees have already been laid off since January, with 75 more to be sent home after Aug. 31, according to company spokesperson Elizabeth Jewel.

Jewel said the economic recession has led to a decrease in demand for steel production, causing one of the company's biggest customers, the Texas-based Peterbilt Motors Company, to reduce its orders significantly.

"When people don't buy new trucks, you don't need to make any casts for them," she said.

Jewel said that the majority of layoffs have come from the labor force, managerial positions have also been affected.

Officials from the Glaziers, Molders and Plasterers Union Local 164B, who represent most of Pacific Steel's workforce, said they understand the need for the drastic employment reductions.

"Why should we be upset with management? It's not their fault," said Carlos Costa, finance secretary for the union chapter. "It's a family-run and family-oriented company, and we want to protect them."

The 300 laid-off workers will have to enter the job market at a time when employers everywhere are scaling back hiring, and public resources for job training and employment services are being stretched thin.

The increased demand for unemployment services has already strained Alameda County employment services, said Sandy McMullan, rapid response coordinator for the Alameda County Workforce Investment Board.

Attesting to the effects of the county's 11.2 percent unemployment rate, McMullan described a recent recruitment fair where 400 job-seekers were competing for the attention of seven employers, and another fair in which one third of 1,600 unemployed attendees had master's degrees.

The board also administers federal funding to local agencies, which then provide displaced workers with access to job fairs, workshops and

counseling centers, among other services, said Owen Hershey, Berkeley site manager for Rubicon Programs Inc., a non-profit organization that seeks to alleviate poverty in the Bay Area.

Hershey added that while the agency has seen a large increase in the use of its career services, federal stimulus funding has helped it keep up with demand.

City of Berkeley officials said that while they are troubled by the need for layoffs, they remain optimistic for the city as a whole.

Julie Sinai, chief of staff for Berkeley Mayor Tom Bates, said that while businesses like the Elephant Pharmacy have recently had to close their doors, other businesses like the new Berkeley Bowl West have opened theirs.

"So a kind of neutralizing effect occurs," she said. "Overall, businesses are struggling, but they are not facing dramatic layoffs like at (Pacific Steel)."

For Pacific Steel, the family-oriented business has found itself especially hurt by the layoffs.

"You have to remember that some of these workers have been there for more than 30 years," Jewel said. "They have brothers, cousins and uncles who work there. There are whole families unemployed, and we can't wait to bring them back."

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