This morning, GE announced it had acquired oil pump maker Lufkin Industries for $3.3 billion.
It’s a good sign for America’s shale boom — as GE said in its release, the pumps “represent a booming $13 billion patch of the oil and gas industry, fuelled by shale and other unconventional sources of energy, and also by the need to make mature oil fields productive again.”
But it means a heck of a lot more to the residents of Lufkin, Texas, population 35,000, and the greater East Texas region.
Lufkin Industries began as Lufkin Foundry and Machine Company in 1902. It made railroad and sawmill equipment.
20-four years later, a man named W.C. Trout, who’d joined the company as a shareholder and company secretary, invented what is essentially the predecessor of the technology GE is acquiring, a counter-balanced pumping rig.
There are now at least two streets named after Trout and his descendants.
Kurth Drive, one of the main drags in the city, is likewise named after Lufkin founder Joseph Hubert Kurth.
We spoke with Lufkin, Texas Mayor Bob Brown about what the acquisition means for the community.
He said the company directly employs 1,100 people in the area.
Undoubtedly, it indirectly supports hundreds more.
“It is by far the bell cow in this county,” he said.
Brown said he had no reason to believe GE will move jobs, though he said some residents were already saying they were worried.
Some local business owners we contacted hadn’t yet heard of the acquisition. Rhonda Oaks, a reporter at the Lufkin Daily News, told us the mood from those she’d spoken with ranged from concerned to cautiously optimistic.
The region’s ABC affiliate reports that GE is saying no jobs will be lost and both employees and customers will benefit from the merger.
“We have no layoffs in the future,” GE oil and gas spokesman Sean Gannon said. “It’s a growing sector and Lufkin Industries is good at what they do.”
Lufkin shares closed up 37.59 per cent today.
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