Grangemouth refinery dispute

INEOS asked the union to guarantee no strike before Christmas .Unite said yes but can we be involved in negotiations about pay and conditions. INEOS find this unacceptable. ..are the just the latest employer in a long line to park their tanks on the workers lawn?

So the petrochemical plant is to close but the refinery stays open for the moment. What a disaster! Looks like INEOS has taken the tanks off the lawn and parked them in the kitchen

Ineos only know how to use a hammer so they seem to be trying to convince everyone that the problem’s a nail. Some folks seem to swallow that but most seem to have seen through it.

Crazy stuff, can’t see any good outcomes tbh, even if by some miracle they’d got things going again with a halfway mutually acceptable answer nobody at the plant would ever trust them again. Would you invest in that? Totally broken.

The site is losing £10,000,000 a month.

According to figures provided by INEOS but not agreed or verified by anyone else. Unfortunately I also can’t see any positive outcome the refinery remains shut down at the moment and it’s very likely to be closed permanently soon.

Okay, if it was making money generally it’d make NO sense to shut down would it. They’d give in/just to get it up and running asap. They obviously NEED to make changes.

There was a Sunday Times article a few weeks back explaining the history of the dispute and something like when the owner nearly lost Ineos a few years back Unite were very unhelpful and put the boot in. So, crushing Unite (and shutting the plant if necessary) is just pay back time…

At the end of the day, the plant doesn’t make a big difference to Ineos P&L so they can easily afford to close it, whereas the workers have a lot more to lose, so I see them as Turkeys voting for Christmas at the moment.

This is the way things are going. As a teacher we voted to reject the next round of imposed pension/condition changes.The reply from COSLA was to shelve the 1% they had offered us this year and tell us we weren’t getting it next year either. “Teachers will not have anything extra in their paypackets this xmas thanks to a militant few.” was the Governments quote. Business rules, workers suck it up.

Its probably so run down and needs a lot of investment, just like the plant down the road from here, where you can cycle through on a nice cycle path,but investment the companies share holders dont want to put into the site, also the possibility that a load of scots may actually vote for independancce will be seriously worrying a lot of scots based companies, one of many to exit in the next few months probably.

hora – Member

Okay, if it was making money generally it’d make NO sense to shut down would it.

Nah, if they feel they can either leverage this situation to make more money in future, or go off and make more money elsewhere.

Remember how this started- it wasn’t about profitability or terms and conditions at all, despite what they’d now like you to think- it was a straight attack on a union official (who’s since been cleared by everyone else, after police involvement, but who they’re still after)

The economics of it are a mess… Grangemouth makes a fortune for people, shutting the forties pipe cost 50 million per day last time apparently. So there’s no shortage of money here. If Ineos can’t run the plant in profit it shouldn’t be up to the workers to take the hit for their failures.

Mad Eric has been scathing:

Ineos has been flagging likely cuts for months but instead of engaging with the situation and organising a coherent plan to save jobs, Unite called a strike over a pathetic and petty issue related to Labour Party internal politics. By the time the union woke up to the reality workers faced, it was too late.
Of course the threat to the refinery itself is palpable, and of course local MPs, MSPs and ministers will do everything we can to try to find another buyer for the closed plant. But what’s the proposition as it stands? Come and enjoy a non-relationship with a militant union acting with its workers’ interests at the bottom of its priorities?

http://ericjoyce.co.uk/2013/10/united-in-calamity/
http://ericjoyce.co.uk/2013/10/2081/

Grangemouth Tragedy

The unions refused to negotiate on pay / pensions.

The average across the whole workforce was over £50K base pay and employer pension contributions exceeding £30K a year.

Grangemouth is the most expensive site in Ineos’ network on operational costs and has been losing money for a while – with wages being one of the biggest costs today’s outcome can’t really have come as a surprise to the employees or their union representatives.

As an outsider it’s really hard to understand why the workforce / union chose not to negotiate when the most likely outcome would inevitably be the loss of all the jobs and everyone having to either face unemployment or finding new jobs further away that will most likely pay a huge amount less in salary and pension. It’s a very sorry state of affairs for the workers and for Scotland so I just hope that this is not the last round of something akin to high stakes poker.

I’ve not seen a split in profitability between the petrochemical site and the refinery. I guess INEOS aren’t looking to share that particular nugget of information.

robdixon – Member

The unions refused to negotiate on pay / pensions.

Er… Ineos have refused to negotiate with them. An ultimatum was put on the table, this is the result, there’s been no attempt at negotiation.

they spend 10 million a month on pensions? I dont think so

I’ve not seen a split in profitability between the petrochemical site and the refinery. I guess INEOS aren’t looking to share that particular nugget of information.

Doesn’t make any difference.

If X side of a business is making £10m profit, and Y side of a business is making £10m loss you don’t shift the money from X to Y to prop it up (not long term anyway).

You either change Y, close it down or move into another market.

Certainly has a huge implications for the referendum but which way remains to be seen. That’s a matter for another thread maybe. INEOS bought the plant from BP and signed up to a contract to take all the gas from the pipeline which is now more costly than they thought so the losses are in a large measure down to mismanagement by Jim Ratcliffe/INEOS. I would like to see INEOS accounts audited but that’s not going to happen.

Insane!, perhaps the long term outcome is that the site will be acquired by another operator and the workers hired again on lower pay and worse terms. If I was a worker there I would want a deal to be done!

Ineos accounts are audited by PwC. Amongst other things Ineos have applied for a license to convert North American Shale Gas at Grangemouth (alleviating the problem with existing cost of gas supply). That won’t happen now though as a liquidator has been appointed today.

djglover – Member

If I was a worker there I would want a deal to be done!

Yup. But there’s an element of “negotiating with terrorists” here- now they know Ineos are willing to just shut it all down on a moment’s notice and issue a list of demands to be accepted without question, what future can they depend on? What happens next month, or next year? You can’t effectively run a workforce by blackmail.

For that matter, as an investor or a customer how much would you want to deal with this company?

It is basically a disaster for all concerned, and no apparent way back.

Another great success for Unite – supporting their members by getting them all laid off. I suspect they’ll exonerate themselves of course….

Yup. But there’s an element of “negotiating with terrorists” here- now they know Ineos are willing to just shut it all down on a moment’s notice and issue a list of demands to be accepted without question, what future can they depend on?

Nothing sudden about this, the issue of the site has been going on for some time, it’s just come to a head in the last few weeks.

Of course. But Ineos’s decision to make it an ultimatum under threat of instant closure was issued last week and enacted today. No negotiation, no discussion- not even a polite pretense. (other than trying to link the change of conditions to the previous strike threat, which I don’t think anyone has fallen for- people can only believe that if they really want to, and even then you need to take a run up)

so a liquidator has already been appointed and a buyer already being sought?

Seems like the plans were always in place and the industrial dispute is a smokescreen

can’t understand people blaming the union here? It is the Union’s job to defend it’s members. The action taken today shows that the company had no intention of negotiating any sort of deal

can’t understand people blaming the union here? It is the Union’s job to defend it’s members. The action taken today shows that the company had no intention of negotiating any sort of deal

If they’d agreed to move from final salary to money purchase pension scheme, they’d have kept their jobs.

Liquidator is for the PC plant, not the refinery – hence my question above.

only one precedent that sets footflaps and it isn’t a good one for any employee anywhere. What is the point of having a union if employers should be allowed carte blanche to hit employees with ‘take it or leave it’ ultimatums?

I listened to Pat Rafferty on BBC4 this morning. He claimed the union were willing to negotiate. It seems clear the company was not.

You see this as the fault of the Union whereas as see it as the fault of the employer

Weellll… It’s the union’s job to protect their employees interests, that doesn’t always mean fighting for the best deal today. We can’t know, but it could be that if they’d hardballed a bit less last time round over the pension scheme, today’s dialogue would be very different. Certainly their detractors will blame the breakdown of relations on the last strike. It’s not really possible for a union to have a clean victory.

Though, it’s probably just as possible that accepting the conditions cuts last time round would have just led to the same place today- it’s been reported that the original drop in conditions wouldn’t have been enough to stop the plant losing money. So there’d be another set of demands on the table sooner or later.

Option the third- if the petrochemical plant was always doomed under Ineos, then nothing the Union could do would save those employees. But if the petrochemical plant closes and the refinery stays open then caving on conditions for the whole workforce could be a very bad move for the survivors.

Who really knows? You can look at conduct today but there’s always a bigger picture.

This for example:

footflaps – Member

If they’d agreed to move from final salary to money purchase pension scheme, they’d have kept their jobs.

Who else thinks it’s that simple?

I predict Alex Salmond, Scottish politician and current First Minister of Scotland to step forward as the saviour of Grangemouth, backed up with tax payers money as the plant will be seen as a strategic UK asset. Jim Ratcliffe, or should that be ‘Sir’, will reluctantly accept ‘our’ taxpayer money and be seen to be magnanimous. (my mate Dave will have a word behind the scene to smooth things through) The plant infrastructure will be upgraded and UNITE will advise its members to do-a-deal which will screw new employees to the plant. All will be well in the world, after the spin doctors sprinkle their fairy dust….

Long live the 1970’s

Well they now have no jobs, so I don’t see what they had to lose by accepting to a cut in pension rights. As it is, they’ll lose much more now they’re unemployed….

To me it seems like a case of cutting off their noses to spite their faces….

I accept that INEOS do have accounts that they post. However an independent study of the accounts was done at Unites request and found them very unclear. A compromise would have been a sensible option but as many have pointed out the owners refused to negotiate. It seems that a liquidator has already been appointed so I am not inclined to believe INEOS ever intended to negotiate. The company has worked in a similar way world wide buy existing plants and drive down costs.
http://www.youroilandgasnews.com/ineos’+global+workforce+stand+side+by+side+with+grangemouth+workers_95421.html

Who else thinks it’s that simple?

Of course not – perhaps if the union rep had spent a little more company time building relations with the management, instead of playing at labour party internal politics, they might have been able to find a way forward?

I reckon chances are that:

— Ineos closes site.
— Much flapping by Salmond.
— SNP fails to find buyer for site.
— SNP offers large bribe (sorry – development grant) to keep site open.
— Workers are reemployed by Ineos on reduced pay and pension terms.
— Certain Unite officials are not reemployed (coincidence that…)
— Site reopened by Ineos.

Ineos aren’t a charity, if they think it makes more business sense to shut a plant, that’s what happens. Unite behaved as if they had all the cards. Whilst it’s a real shame they all lost their jobs, I see Unite as having a large part to play in the plants closing.

This is just classic British industrial relations bullshit. Have the management and unions learned nothing in the last fifty years. Everyone loses yet all stand around blaming each other.
Just total crap

Well no one can say it is a surprise that they’ve closed surely, after all the warnings they gave, perhaps a bit sooner than expected though. I’m sure Salmond will pump some tax payer money into it to keep his dream alive one way or another. Politics and business hey!

Ineos aren’t a charity

Even if they were it wouldn’t change much, charities have also been known to change pension schemes on an accept it or leave basis.

footflaps – Member

Well they now have no jobs, so I don’t see what they had to lose by accepting to a cut in pension rights.

Really? The problem is that they’d have accepted a change in terms and conditions in 2008, and now might well be in the same boat, just worse off. The idea that accepting 2008’s demands would have averted 2013’s problems is unconvincing- the plant’s problems are far deeper than that.

Union guarantees no strike action

Asks for clarity of published accounts

States willingness to discuss rescue plan to keep plant open

Ineos is not a charity but an employer has an obligation to look after the people who make it money. In this case the company claims large losses are being incurred through current wage structure. If the plant needs 300 million in investment then perhaps some of the claimed losses could be attributable to this lack of investment?

From what I can see the Union has been open in stating it’s committment to dialogue. Of course, none of us know what goes on behind closed doors but it seems that the company offered a take it or leave it settlement to the workers.

What would the workers do in two or three years if faced with a similar situation?

What footflaps proposes is just a race to the bottom for everyone. I could understand where you are coming from if the Union had stated no intention to compromise or discuss but they haven’t done that.

with wages being one of the biggest costs today’s outcome can’t really have come as a surprise to the employees or their union representatives.

I find it VERY difficult to believe that the staff costs are one of a refinary’s biggest costs. There will be massive pressure coming down from on high to sort this out as there are significant implications for oil and gas revenue for the UK as a whole.

As for the losses, didn’t INEOS write down the value of it’s assets this year to make it look like a loss when in fact it was making money? There have certainly been some accusations of creative accounting going on. The plus side is of course that this right write down will lower any sale price!

As for the pensions, I suspect that this will be a hangover from the BP days. When BP sold the Forties field there was a requirement that whoever took it on would maintain the final salary pension scheme for transferred employees.

Whats the betting that the company directors werent volunteering to change thier pension scheme to match the one they were offering to employees?