Welders $200,000
12-11-2014 | 08:27 PM
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Welders $200,000
Welders Earning $100 an Hour Hindering U.S. Chemical Boom
By Christopher Martin and Jack Kaskey Dec 10, 2014 11:49 AM ET 129 Comments Email Print
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Photographer: Aaron M. Sprecher/Bloomberg
The Houston metropolitan area added 12,900 construction jobs in the year through... Read More
John Floren’s plans to dismantle two petrochemical plants in Chile and rebuild them in Louisiana didn’t include paying welders and pipe fitters more than $100 a hour, almost 20 percent more than expected.
That’s one reason the project has run at least $300 million over budget, said Floren, chief executive officer of Vancouver-based Methanex Corp. (MEOH)
A growing surplus of cheap natural gas from shale drilling is driving a boom in the U.S. chemical industry, which uses the fuel as a raw material for plastics, fertilizer and paints. Plans by chemical companies to build or expand 215 plants worth $133 billion in the U.S., however, are overwhelming the construction work force in the primarily rural areas where they would be located, boosting costs and causing delays.
“We’re all competing for the same limited workforce,” Floren said in an interview. “The only way to address that is train people, which takes time, or bring in foreign workers, which is not allowed.”
Other chemical companies are facing the same issues, Nassef Sawiris, the CEO of OCI (OCI) NV, said in a joint interview at Bloomberg’s New York headquarters with Floren and Charlie Yao, chief of the Chinese methanol producer Yuhuang Chemical Inc.
“It’s a shocker,” Sawiris said.
OCI, based in Geleen, Netherlands, is already over budget because of labor costs at a nitrogen fertilizer plant under construction in Iowa, according to Sawiris, and he’s having difficulty finding trained construction workers at a methanol facility in Texas that’s expected to open in 2016.
Reconsidering Plans
Some companies are probably reconsidering building plans as a result of the labor crunch, he said. “There were like 10 projects announced after our project got started,” Sawiris said. “None of them in the last 18 months has hit the ground.”
Cost increases will only get worse as new methanol and ammonia plants compete for construction labor with liquefied natural gas terminals and ethylene plants on the U.S. Gulf Coast, said Chris Shaw, a New York-based analyst at Monness, Crespi, Hardt & Co. Project delays and cancellations are likely making chemical supplies tighter than forecast, he said.
The specialized skills needed to build these plants haven’t been in demand for decades. With so much cheap gas, companies are now planning chemical facilities across the region, and the wave of investment has boosted employment around the Gulf. The Houston metropolitan area added 12,900 construction jobs in the year through October, more than any other region, according to an analysis of federal employment data by the Associated General Contractors of America.
Biggest Worry
The trade group found in a September survey of 1,086 construction firms that 83 percent had trouble filling some craft positions and 62 percent had difficulties finding people for professional jobs.
“The biggest worry for most contractors these days is the availability of construction labor, especially for specialized projects” like chemical plants, said Ken Simonson, the industry group’s chief economist. “So many projects requiring the same skill set have been announced or planned that there are sure to be delays, either in fabricating and delivering components, or in erecting them.”
To contact the reporters on this story: Christopher Martin in New York at [email protected]; Jack Kaskey in Houston at [email protected]
By Christopher Martin and Jack Kaskey Dec 10, 2014 11:49 AM ET 129 Comments Email Print
Google+
Save
Photographer: Aaron M. Sprecher/Bloomberg
The Houston metropolitan area added 12,900 construction jobs in the year through... Read More
John Floren’s plans to dismantle two petrochemical plants in Chile and rebuild them in Louisiana didn’t include paying welders and pipe fitters more than $100 a hour, almost 20 percent more than expected.
That’s one reason the project has run at least $300 million over budget, said Floren, chief executive officer of Vancouver-based Methanex Corp. (MEOH)
A growing surplus of cheap natural gas from shale drilling is driving a boom in the U.S. chemical industry, which uses the fuel as a raw material for plastics, fertilizer and paints. Plans by chemical companies to build or expand 215 plants worth $133 billion in the U.S., however, are overwhelming the construction work force in the primarily rural areas where they would be located, boosting costs and causing delays.
“We’re all competing for the same limited workforce,” Floren said in an interview. “The only way to address that is train people, which takes time, or bring in foreign workers, which is not allowed.”
Other chemical companies are facing the same issues, Nassef Sawiris, the CEO of OCI (OCI) NV, said in a joint interview at Bloomberg’s New York headquarters with Floren and Charlie Yao, chief of the Chinese methanol producer Yuhuang Chemical Inc.
“It’s a shocker,” Sawiris said.
OCI, based in Geleen, Netherlands, is already over budget because of labor costs at a nitrogen fertilizer plant under construction in Iowa, according to Sawiris, and he’s having difficulty finding trained construction workers at a methanol facility in Texas that’s expected to open in 2016.
Reconsidering Plans
Some companies are probably reconsidering building plans as a result of the labor crunch, he said. “There were like 10 projects announced after our project got started,” Sawiris said. “None of them in the last 18 months has hit the ground.”
Cost increases will only get worse as new methanol and ammonia plants compete for construction labor with liquefied natural gas terminals and ethylene plants on the U.S. Gulf Coast, said Chris Shaw, a New York-based analyst at Monness, Crespi, Hardt & Co. Project delays and cancellations are likely making chemical supplies tighter than forecast, he said.
The specialized skills needed to build these plants haven’t been in demand for decades. With so much cheap gas, companies are now planning chemical facilities across the region, and the wave of investment has boosted employment around the Gulf. The Houston metropolitan area added 12,900 construction jobs in the year through October, more than any other region, according to an analysis of federal employment data by the Associated General Contractors of America.
Biggest Worry
The trade group found in a September survey of 1,086 construction firms that 83 percent had trouble filling some craft positions and 62 percent had difficulties finding people for professional jobs.
“The biggest worry for most contractors these days is the availability of construction labor, especially for specialized projects” like chemical plants, said Ken Simonson, the industry group’s chief economist. “So many projects requiring the same skill set have been announced or planned that there are sure to be delays, either in fabricating and delivering components, or in erecting them.”
To contact the reporters on this story: Christopher Martin in New York at [email protected]; Jack Kaskey in Houston at [email protected]
12-11-2014 | 08:31 PM
#2
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And we have management on here saying regional first officers should not start at $100,000/year.
The party is over. We will no longer tolerate this nonsense. A college degree, $100,000 of training and the years to get 1500 hours of experience will yield a minimum of $100,000.
As with welders, it's simple supply and demand.
The party is over. We will no longer tolerate this nonsense. A college degree, $100,000 of training and the years to get 1500 hours of experience will yield a minimum of $100,000.
As with welders, it's simple supply and demand.
12-11-2014 | 09:11 PM
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From: lav specialist
Welders $200,000
Yeah, I worked in a steel shop for over a year grinding and welding before I started flying. Have fun sweating and or freezing your ass off while getting cancer doing that ****! Hahah what a bunch of whiney pilots on here... Amazing.
12-11-2014 | 09:32 PM
#6
Are we there yet??!!
Joined: Apr 2006
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Back to normal programming.
12-11-2014 | 09:56 PM
#7
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From: Sleeping
The only thing this article highlights is that it says ' they are all competing for the same work force' that doesn't happen in our sector of work.
Pilots are still competing for the same jobs. Therefore no %20 raise.
Pilots are still competing for the same jobs. Therefore no %20 raise.
12-12-2014 | 05:25 AM
#9
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Joined: Apr 2010
Posts: 675
Likes: 20
By all means, please go become a welder. Weeks on the road doing contract work in the middle of nowhere. Working with a bunch of sweaty dudes all day. Blowing off steam at the local watering hole at night. Sending your paycheck back home so the ex wife can spend it. Doesn't sound too much different than flying.
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