Grangemouth

[Tonsilitis]

There is something wrong when one of the biggest businesses in Scotland and 1800 jobs relies on the whim of a billionaire speculator as to whether it stays open or closes.  From a purely financial perspective quite how liquidating the plant and the write downs they will take from that is better for Ineos I am not sure.  Likewise I am not sure what the deal offered was but simply arithmetic says that if the plant is losing £120m per annum, thats around £6,500 per worker across the workforce.  I have no idea what that represents in a percentage pay cut or change to pension entitlement.

 

It seems to me though, that taking a 10% (say) pay cut to save your job is something people should consider.  The trouble is, how do you stop that becoming a regular tool of companies like Ineos who clearly have no social conscience or concept of good corporate citizenship at all.

 

Likewise, final salary scheme pensions are just not affordable by any business any more.  Most private sector companies now operate money purchase scheme pensions with most remaining final salary scheme pensions being in the public sector where they are funded by the taxpayer.  Even there, government is trying to change that.  I don't know the detail but I would guess that that is what is wanted at Grangemouth, putting that workforce in a similar position to most other private sector workers.

 

Ineos sound like a shower of sh!ts but it might be that there has to be some realism from the workforce also?  

 

What a mess!

[Colkitto]

There’s also an on going dispute over the activities of the site’s Unite convenor Stephen Deans, who is the subject of an investigation by Ineos over the alleged use of company time and premises to pursue matters relating to the Labour Party.

Deans had been suspended by Ineos during an inquiry, but was reinstated pending the outcome after the union threatened to strike and close the entire facility.

 

Although the union called off the strike, the company closed down the plant anyway, and the facility was never fired up again.

[.:BrIDo:.]

Years of wrangling between Ineos and Unite has brought it to thise conclusion. 

 

The question has to be asked of the Scottish government though - why haven't they intervened more readily? This has been going on for months. 

 

How is this going to play out politically? Salmond to want it nationalized? Would Cameron do it? Can he afford not to do it? Would the Scottish electorate vote Yes to spite Cameron, or well and truly shite themselves because we've lost the refinery and 10% of the Scottish economy?

 

No one other than Ineos will be able to make that plant as profitable as they could have given the deals the 'package' they had in place (including lucrative exclusive contracts for US shale gas).

 

What a cluster fuck. 

[Alibi]

The Scottish Government only has limited powers in this matter.  For example they have no power to nationalise the plant, which could probably be justified as being in the national interest.  Seems to me that they are trying hard to find a solution - when exactly do you think they should have intervened in what is on the surface a company/workforce dispute?

 

It has been suggested that the UK government, or to be more accurate the Better Together lot, are not too unhappy at the prospect of this plant closing as they could use it as another scare story to convince the gullible that we are unable to run our own nation.

 

There is a lot more to this than we are being told - a company that appears to have been looking for a dispute that can be used as a battering ram to either get the plant closed or to be offered grants to keep it going, and a trade union official more intent on looking after his own interests than those of his members.  I suspect there is a lot more to come out in the wash here.

[Tonsilitis]

I wonder if Grangemouth was a competitor for some other more lucrative arm of the Ineos empire.  That they were looking for an excuse to close seems pretty obvious.

[Colkitto]

Years of wrangling between Ineos and Unite has brought it to thise conclusion. 

 

The question has to be asked of the Scottish government though - why haven't they intervened more readily? This has been going on for months. 

 

How is this going to play out politically? Salmond to want it nationalized? Would Cameron do it? Can he afford not to do it? Would the Scottish electorate vote Yes to spite Cameron, or well and truly s***e themselves because we've lost the refinery and 10% of the Scottish economy?

 

No one other than Ineos will be able to make that plant as profitable as they could have given the deals the 'package' they had in place (including lucrative exclusive contracts for US shale gas).

 

What a cluster ****. 

 

 

Energy is reserved to Westminster. All Salmond and the Scottish government can do is act as honest brokers between the two sides.

They can also do all they can to try and find a buyer if anyone is interested.

 

 

and as Alibi has stated, for Grangemouth to close then it plays right into the No campaign. An independent Scotland can can't refine it's own oil?  

 

No surprise Cameron has already ruled out nationalising it!

[Alibi]

I wonder if Grangemouth was a competitor for some other more lucrative arm of the Ineos empire.  That they were looking for an excuse to close seems pretty obvious.

 

I think there is also that aspect.  The Grangemouth refinery produces stuff for export and we import stuff from elsewhere.  I understand it's to do with factors such as the mix of API values and the variety of products.  However as with most things nowadays it is possible to get the work done elsewhere at a lower cost, and that is probably Ineos' ulterior motive.  They don't care that it is a strategic asset.  I suspect that it would be quite possible to export the raw crude for refining elsewhere and then re-import the finished product.  That would maybe also tie in with the close down of the petrochemical plant as presumably it gets its feedstock from the refinery.  Also affects other local companies that have direct supply pipelines from the complex.

 

To me this seems like a "must save" complex.  Don't expect Westminster to help in that respect though - and incidentally why has Alistair Carmichael, the new Scottish Secretary, been all over the BBC today with his not so subtle propaganda message?  Every time I turn on the radio he's being interviewed.

[Guest David Edwards]

Pat Rafferty summarised best by describing the plant's closure as 'an act of economic and industrial vandalism'. The owners are completely devoid of social conscience, surely demonstrating why industries critical to a nation's infrastructure should not be left in private hands. Both local and national economies will be seriously damaged if the plant does not survive, with significant and widespread social consequences.

Grangemouth can't afford this. Scotland doesn't deserve this. The Scottish Government, working together with the workforce and the wider community, must do everything within its power to prevent this happening.

[Colkitto]

What's really happening at Grangemouth and what it tells us

 

http://www.opendemocracy.net/ourkingdom/robin-mcalpine/whats-really-happening-at-grangemouth-and-what-it-tells-us

[Rasta Ton]

I suspect that the losses are only paper losses where the plant has been bought and/or financed with debt and a deliberate devaluing of capital assets. Apparently the plant makes a semi-decent operating profit when all that is stripped away. Unfortunately the plant's owners are the type of wealth creators Cameron and Geirge want more of where an entire economic policy allows a select few to accrue billions at the expense and misery of thousands less fortunate.

[Guest David Edwards]

What's really happening at Grangemouth and what it tells us

 

http://www.opendemocracy.net/ourkingdom/robin-mcalpine/whats-really-happening-at-grangemouth-and-what-it-tells-us

Excellent article Col. Thanks for posting it.

[Rasta Ton]

I see that it was also announced today that the old CIBA paint plant in Paisley is to close with the loss of 180 jobs. A black day in what is left of Scotland's industry.

[.:BrIDo:.]

What's really happening at Grangemouth and what it tells us

 

http://www.opendemocracy.net/ourkingdom/robin-mcalpine/whats-really-happening-at-grangemouth-and-what-it-tells-us

 

The unions gave strike notice and it takes 7 days to shut down the plant. The unions called the strike off with 2 days to go, and Ineos wanted assurances that they wouldn't threaten strike action again until January before they fired it back up. The union refused, and Ineos left the table and then offered the contracts, which they ultimately refused. 

 

The contracts they were offered (including the pension reform) are reasonable and the pension plan is better than most private pensions and well within what you'd expect from an oil and gas company. 

 

The part about MacLean laughing and joking was also bollocks, apparently he was sympathetic in delivering the news to the work force. That article does tell part of the story but not the whole story.

 

Regarding the state of the company, even if it is making money at present, who's to say they didn't take a pragmatic approach, looked ahead and realised that the rate salaries were increasing and the cost of the pension fund meant that in 10 years time they would have run out of money. If you ran a business, would you try and stop that early on to let the company continue as long as possible or would you kick back, pump up the salaries and be left with nothing in a decade? People who run large, profitable, multinational businesses are in it for the money. You're probably quite safe to assume 2 things about them:

1.) They wouldn't just sell a massive, profitable asset to prove a point and 

2.) They wouldn't continue down a road to certain bankruptcy.

[Guest David Edwards]

 

The unions gave strike notice and it takes 7 days to shut down the plant. The unions called the strike off with 2 days to go, and Ineos wanted assurances that they wouldn't threaten strike action again until January before they fired it back up. The union refused, and Ineos left the table and then offered the contracts, which they ultimately refused. 

 

The contracts they were offered (including the pension reform) are reasonable and the pension plan is better than most private pensions and well within what you'd expect from an oil and gas company. 

 

The part about MacLean laughing and joking was also bollocks, apparently he was sympathetic in delivering the news to the work force. That article does tell part of the story but not the whole story.

 

Regarding the state of the company, even if it is making money at present, who's to say they didn't take a pragmatic approach, looked ahead and realised that the rate salaries were increasing and the cost of the pension fund meant that in 10 years time they would have run out of money. If you ran a business, would you try and stop that early on to let the company continue as long as possible or would you kick back, pump up the salaries and be left with nothing in a decade? People who run large, profitable, multinational businesses are in it for the money. You're probably quite safe to assume 2 things about them:

1.) They wouldn't just sell a massive, profitable asset to prove a point and 

2.) They wouldn't continue down a road to certain bankruptcy.

 

Thank you Mr Ratcliffe, you do have a way with words I must say. Throwing 800 on the dole, effectively forcing an entire community to put the shutters up, can be described as 'taking a pragmatic approach'. Perhaps all is not lost however:-

http://www.bbc.co.uk/news/uk-scotland-24647843

It seems that the workers might have to eat s***e to save their livelihoods. Nothing new there then, merely history repeating itself.

[Rasta Ton]

 

The unions gave strike notice and it takes 7 days to shut down the plant. The unions called the strike off with 2 days to go, and Ineos wanted assurances that they wouldn't threaten strike action again until January before they fired it back up. The union refused, and Ineos left the table and then offered the contracts, which they ultimately refused.

 

The contracts they were offered (including the pension reform) are reasonable and the pension plan is better than most private pensions and well within what you'd expect from an oil and gas company.

 

The part about MacLean laughing and joking was also bollocks, apparently he was sympathetic in delivering the news to the work force. That article does tell part of the story but not the whole story.

 

Regarding the state of the company, even if it is making money at present, who's to say they didn't take a pragmatic approach, looked ahead and realised that the rate salaries were increasing and the cost of the pension fund meant that in 10 years time they would have run out of money. If you ran a business, would you try and stop that early on to let the company continue as long as possible or would you kick back, pump up the salaries and be left with nothing in a decade? People who run large, profitable, multinational businesses are in it for the money. You're probably quite safe to assume 2 things about them:

1.) They wouldn't just sell a massive, profitable asset to prove a point and

2.) They wouldn't continue down a road to certain bankruptcy.

I read somewhere that staff renumeration for the Grangemouth workforce accounts for something like 1.6% of total operating costs. If that is true then the overall effect if any savings is paltry.

 

Also, you failed to mention that there are two types of shutdown - one where the furnaces and pipelines are kept open and one where the whole place is shut down. The union in giving notice to strike offered the former, giving assurances that H&S would not be compromised so that once the dispute was settled production could re commence almost immediately. The plant owners used the dispute as an excuse to shut the whole place down.

 

Best to give the whole story eh?

 

I see Red Ed has been very quiet on this whole saga and one can't help but wonder if we would have arrived at this situation had he not waded in over the Falkirk MP selection saga.

[Earnton]

Its a terrible situation for the Grangemouth area and the workers , particularly the ones who accepted the revised conditions required to keep the plant open. The Union got it catastrophically wrong in their assessment of the situation and their recommendation to workers and led them to a disastrous vote.

 

£40,000 salaries, final salary pension scheme, bonuses, guarantee overtime......these things are pretty rare in the private sector now, surely the union should have recognised the seriousness of the situation and the requirement to make concessions. Were they more interested in the Union's reputation than the outlook for the workers.?

 

The really sad message for me is not only have theye voted to close the plant but they have voted away future potential employment for 1000s of youngsters in the surrounding area.  

[Rasta Ton]

Its a terrible situation for the Grangemouth area and the workers , particularly the ones who accepted the revised conditions required to keep the plant open. The Union got it catastrophically wrong in their assessment of the situation and their recommendation to workers and led them to a disastrous vote.

 

£40,000 salaries, final salary pension scheme, bonuses, guarantee overtime......these things are pretty rare in the private sector now, surely the union should have recognised the seriousness of the situation and the requirement to make concessions. Were they more interested in the Union's reputation than the outlook for the workers.?

 

The really sad message for me is not only have theye voted to close the plant but they have voted away future potential employment for 1000s of youngsters in the surrounding area.

It is a game of brinksmanship on both sides with the workforce caught in the middle. With the union agreeing to everything, it is now down to Ineos to accept and re-open or show their true intention to shut down the plant regardless.

[Alibi]

Unite come out of this looking like clueless idiots with their own agenda.  Ineos come out of it looking like something from the Victorian era.  Caught in the middle is the workforce that by most accounts seems to be very well paid.  If the company genuinely is making a loss then costs have to be cut - and I suggest that if overseas plants are undercutting them, there is justification for cost cutting, however it should be in all areas, not just in wages.  The problem is that Ineos are devious and are using accounting sleight of hand to bolster their argument.  Maybe they should sit down and explain why they need to cut costs, and be open about it.  The workforce could probably accept reductions in remuneration if they thought it was genuinely necessary, but the sledgehammer approach is not the way to get agreement.  In my experience companies run better if the workforce benefits when times are good, and that way they are more prepared to accept the situation when times are harder.

 

The final salary pension scheme looks to me like the major problem.  With current interest rates, these things are unaffordable, especially as people are living much longer and therefore drawing pensions for longer - as a proportion of your total lifespan your pension-drawing years are several times what they were when people worked until 65 and lived on average to 70.  Such schemes are simply not viable nowadays.

[.:BrIDo:.]

Thank you Mr Ratcliffe, you do have a way with words I must say. Throwing 800 on the dole, effectively forcing an entire community to put the shutters up, can be described as 'taking a pragmatic approach'. Perhaps all is not lost however:-

http://www.bbc.co.uk/news/uk-scotland-24647843

It seems that the workers might have to eat s***e to save their livelihoods. Nothing new there then, merely history repeating itself.

 

The way Grangemouth has came about over the years has meant that one union covers the entire site despite it being split into seperate businesses by Ineos. A strike action can - theoretically - shut down the forties line and affect about 80 platforms with it. The union have always had that power and my understanding is that they have held it over Ineos repeatedly. Apparently one of the proposals was to have separate unions for the different constituent businesses - which is how the other refineries in Britain operate and would actually protect workers in one part of the site from the other, such as those in refinery voting against changes if those in petrochemicals realised they were needed.

 

It's been caused by a draconian 'us versus them' mentality that has persevered in a dated system which came about when Britain was an industrial powerhouse and employment rights were non existent. Union's are dated and a better approach is needed in how floor staff are represented at board level. The article on open democracy is spot on about all of that. 

[chrissiboi]

I suspect that the losses are only paper losses where the plant has been bought and/or financed with debt and a deliberate devaluing of capital assets. Apparently the plant makes a semi-decent operating profit when all that is stripped away. Unfortunately the plant's owners are the type of wealth creators Cameron and Geirge want more of where an entire economic policy allows a select few to accrue billions at the expense and misery of thousands less fortunate.

BINGO we have a winner !!! That sums it up in a nutshell. Read the wages account for less than 5% of the turnover, Ineos saved 100million in tax by moving headquarters to Lausanne.

 

Part of the problem is the US and their artifically low gas and fuel prices, this is short term and Ineos are looking for a handout of public money to upgrade the plant.