FORT SMITH (KFSM) – The low price of a barrel of oil is not just hurting the companies drilling it. Some people are losing their jobs in the metal recycling industry.
Davis Iron and Metal in Fort Smith recently laid off one third of its employees, according to general manager Walter Blackburn.
“This is the worst market today that we've had in about 12-15 years,” Blackburn said on Wednesday (Jan. 20).
The company recycles metal, electronics and glass. The metal is sold to steel mills throughout the region, and ends up in the equipment used by oil companies.
When companies aren't drilling as often, their metal equipment isn't being replaced.
“They’re not buying, so we don't have anywhere to go with the material,” he said. "It's been a steady punch in the gut for the last year and half."
He said the company used to have 52 employees; it now has about 30.
“The owner's got a big heart; he doesn't like putting someone out of work, taking food off someone's table,” Blackburn said. “So we held off as long as possible, and just a couple weeks ago, right after the holidays we had to take a large group and give them a severance package and had to lay them off."
The only perk is the low price of fuel for the company’s equipment. But, he said they would rather pay more for fuel, and have their employees.
“When we buy 80,000 gallons of fuel a month, that's a big savings for us, but we'd rather have people in jobs,” he said. “That cheap gas price comes at big cost.”
Blackburn said the company has been in Fort Smith for nearly 40 years.
“We’ll get through this. We’ve been through this before; we’ve been through this a few times, every time it’s dipped. And we’ll get through this one as well,” he said. “We have a lot of friends and neighbors in the industry that are suffering and have gone out of business or are will be going out of business because of this.”
He said across the metal recycling industry, sales have dropped about 70 percent in the last year and half.