McDermott International announced on Monday that it has plans to suspend operations at its historic Morgan City Fabrication Yard – a closure that is expected to be complete by early 2014.
A statement released by Gov. Bobby Jindal said that the decision to close the yard would result in employee reductions at the fabrication yard – marking a “disappointing” day for the St. Mary Parish city.
“This is a big loss for the city of Morgan City,” Mayor Boo Grizzaffi said. “All we can hope for is that whoever takes over that yard will put us in a position to be better off than what we had.”
“This is obviously very disappointing news for our people and our entire state,” Jindal said in a statement. “McDermott’s fabrication yard has been a source of pride for the Bayou Region and all of Louisiana for many years.”
“Personally, this is very hard to see,” added state Rep. Sam Jones (D-Franklin). This is such an iconic entity. It had so much to do with the oil field in this area for so many years. People have worked there from all parts of St. Mary Parish, St. Mary Parish and Iberia Parish and all of the areas surrounding. It’s just a sad day.”
Grizzaffi said that Morgan City worked very hard to keep McDermott in the area.
He said that Morgan City and state representatives presented the company with plans and incentives to try and build their relationship into the future.
But Grizzaffi said that after a BP project fell through, McDermott decided that its days in Morgan City were numbered.
“I think when BP made the decision to rebid that project out, I think it really deflated them,” Grizzaffi said. “I think that at that time, they had a lot of contracts that were coming to a close, and I think they had a lot riding on that BP deal. When that didn’t come through, I think it forced their hand.
“We’ve done about as much as we can. But at the end of the day, McDermott makes their own decisions. If they decide to close it down, then it’s up to us to live with it and adjust to something else.”
Jindal agreed and assured people that the state did all that it could to keep the company in business locally.
“We have worked closely with local and corporate officials of McDermott for the past two years in an attempt to find a way to keep this yard open,” he said. “Unfortunately, the water depth there has made it very difficult for the company to compete for heavy deepwater projects.”
The sunshine at the end of the rainbow, according to Jindal and Jones is the timing of the decision.
The governor touted the explosion of the oilfield locally as a plus because it means McDermott’s workers will be able to find work.
Jones agreed with the governor and said that many companies in the surrounding area have boomed in recent years and are looking for hands.
“It just so happens that at this time, there’s such a demand for work,” Jones said. “And that’s across the spectrum in St. Mary Parish. It’s never a good time to see an entity like that close down, but I don’t think that the workers will have a whole lot of trouble finding another place to go.”
With the fabrication yard set to move out of the area, Grizzaffi and Jindal said Morgan City’s focus is now to move forward.
Grizzaffi said that other companies would now be able to bid to take over the former McDermott yard, which would keep a lot of jobs in the city.
He said that because of the yard’s size, it can either be completely taken over by a large company or split into several pieces by smaller companies.
Those scenarios will be hashed out in the coming weeks by Grizzaffi, Jindal and other officials.
“This can easily be divided up into a lot of pieces to give a lot of different companies a shot,” Grizzaffi said. “From what I understand, there is a lot of interest in it. Our first bet would have been for McDermott to stay, but now that they’ve decided to leave, we have to turn all of our attention forward to who wants the yard so that we can make sure that someone can get in there.”
“We are resilient,” Jones added. “As the world changes, we realize that we have to change with it. We’re going to do that and we’re going to be OK.”
McDermott’s Morgan City lot is shown in an overhead shot. The company has decided to close its longtime lot in the city – a move that has saddened local leaders.