Houston companies feeling the pinch from drop in crude oil prices

Tuesday, March 10, 2020
Manufacturing company prepares for stock market effects
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WATCH: One Houston-area company says last downturn, it's employees suggested reduce their salaries so more people can keep their jobs.

HOUSTON, Texas (KTRK) -- It's not just the oil and gas companies that are feeling the pinch with the drop in crude. There are many other companies that make parts and supplies that are also concerned, companies like Drilformance.

Rusty Petree showed ABC13's Marla Carter around their shop.

"This is the Drilformance manufacturing facility. We manufacture drill bits, mud loaders," said Rusty Petree, Drilformance, LLC.

Being a part of the energy industry, they are used to the market fluctuating.

"We actually launched the business in December 2008, which is right after oil had dropped 70 percent," said Petree.

SEE ALSO: Dow drops 7.8% as free-fall in oil, coronavirus fears slam markets

Then things went up. "We were named the third fastest growing company in Houston in 2012," said Petree.

Then, the market took a dip in 2014 and got better, until recently.

"The energy industry is not for the faint of heart to begin with," said Petree.

Drilformance has 325 employees, with 90 of those right here in Houston.

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Petree says they'll make adjustment.

"We're not a public company. We don't have shareholders to answer to, we're not worried about the next quarter, so we're able not to be draconian like some of the large energy companies are in terms of cutting staff," said Petree. "In fact, in the last downturn, our staff came to us and said let's reduce our salaries so more people can keep their jobs."

It's a concern across the country, just ask energy expert Bob Cavnar.

"The investment community, especially the energy industry, hates uncertainty. We like kind of knowing, understanding what the rules are, understanding what the response of the government's going to be within some range of option," said Bob Cavnar, energy expert.

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