Grangemouth in crisis as it speeds towards deadline

Scotland's troubled oil refinery remains closed as it waits for staff to accept its controversial 'survival plan.'

by Gabriella Griffith
Last Updated: 24 Oct 2013
As 6pm draws nearer, Scottish first minister Alex Salmond’s nails must be getting shorter and shorter – it is the time by which staff at the Grangemouth oil refinery must accept new employment terms or possibly see the plant, which produces around 80% of Scotland’s fuel, close permanently.
 
Ineos, the refinery owner, has said staff must accept the ‘survival plan’ – which includes a cut to pensions, overtime and holiday entitlement, or lose their jobs. On the other side of the picket line, Unite union is calling for workers to reject the new pay and conditions.
 
The plant closed down on Wednesday last week in anticipation of a strike by workers, despite the industrial action (planned for Sunday) being called off. Ineos gave a proposal to staff on Thursday asking for signed responses by 6pm this evening, it has said without full support from staff, the plant will remain shut.
 
This isn’t just a petty union scuffle. Scotland needs Grangemouth – not only does it provide 80% of the country’s fuel but along with its supply chain, it accounts for around 10% of its GDP. It’s also Scotland's only oil refinery. Salmond, whose push for Scottish independence stands to be damaged by any closure, has urged refinery owner Ineos to ‘fire up’ the plant one more and beseeched the Unite union to make a ‘no strings’ promise not to strike.
 
So far, Ineos has said it has received 300 positive returns from staff but with a total workforce of 1,350 (and Unite’s claim it has been given 500 forms rejecting the offer) things are not looking good. Despite the odds mounting against the refinery, Calum McLean, chairman of Ineos Grangemouth, said he remained ‘pretty confident,’ but was keen to stress the dire financial situation the refinery is in.
 
‘People need to realise that this site has lost £150m per year for the last four years,’ said Mclean.
 
‘It has got a pension fund which is £200m in deficit and it is on the point of going bust. If it wasn't because of the support of the shareholders, who are funding those losses, then there is a very, very serious situation here which means the site may not start up again.’
 
Ineos has tried to sweeten the deal for staff by offering a transitional payment of up to £15,000 and an enhanced employer contribution to their pension. But Unite has accused Ineos of ‘bribes and blackmail.’
 
‘We have continuously given assurances of no strikes from now up until December,’ said Pat Rafferty, Scottish secretary of Unite.

‘We are not imposing any conditions. Ineos wants to come to the negotiating table at the same time as threatening our members and threatening people here with the sack in 45 days. You can't negotiate and impose at the same time.’
 
Ineos has claimed that without significant investment, and the changes to workers’ terms and conditions, the plant will close by 2017. It has proposed a £300m gas import terminal at Grangemouth as part of that ‘investment’.
 
‘If it stays shut, Grangemouth runs out of money quite quickly on that basis,’ said Ineos chairman Jim Ratcliffe.
 
‘Ineos won't continue funding it beyond a reasonable amount of time and certainly has no obligation to.’
 
Closure would be bad news for Grangemouth’s employees, bad news for Alex Salmond and bad news for the UK’s struggling energy supplies...and the clock is ticking.


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