StoneAge, the maker of water-blasting cleaning tools and one of Durango’s few industrial firms, has laid off 12 employees amid a global economic slowdown caused by the COVID-19 pandemic.
StoneAge CEO Kerry Siggins said the company expects to see sales decline 30% in 2020 compared with 2019, the first time the company’s sales have not risen since it was founded in Durango in 1979 by John Wogamott and Jerry Zink.
Of the 12 employees who were laid off June 17, 10 were located in Durango, Siggins said. StoneAge has 138 employees globally and 105 are located in the Durango headquarters.
“It’s definitely COVID-related. As economies shut down and people weren’t working, it definitely had a decrease in demand for our products,” Siggins said.
Key customers, especially in oil refining and chemical plants in Texas, Louisiana and California, have been slowed by the novel coronavirus, and the trickle-down effects have lowered sales of StoneAge’s water-blasting cleaning tools.
Refineries and chemical plants in Europe and China are also experiencing slowdowns, Siggins said, and that’s contributing to weaker demand for water-cleaning tools used principally in industrial applications to minimize or eliminate the use of solvents or chemicals that harm the environment.
Food-processing plants, another big market, are also seeing slowdowns related to the novel coronavirus.
Siggins said StoneAge expects a slow recovery for companies using their water-blasting cleaning tools. She expects maintenance and capital investments will be delayed until the economy shows signs of strength.
“We’re not expecting to see a turnaround for our industry until 2021 and maybe even into 2022. It just depends on what happens with COVID,” Siggins said. “And, you know, the greater the impacts from COVID the greater the longer-term impacts on the economy. Right now, we’re seeing cases increasing, in some states skyrocketing.”
StoneAge will survive the current slowdown, but, she said, not without taking painful measures like the layoffs required to ensure long-term viability.
“We’ll be fine, but 2020 is going to be the most difficult year this company has seen. So we want to make sure that we are taking the right actions to ensure that the company can weather this storm and then come into 2021 stronger,” she said. “But a 30% decrease in sales when you’ve increased year-over-year is not insignificant.”
She added: “With COVID, there’s just so much uncertainty. We’re not expecting any kind of recovery until 2021, but not a full recovery till 2022. That’s what I’m planning on right now. But, you know, there’s lots of things that could change that on the upside or the downside. Right now, my crystal ball is filled with COVID. I don’t think anyone can really tell you with any certainty how this will all play out.”