The owner of the Grangemouth petrochemical plant is to close the operation

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TEESSIDE SCAFFOLDER

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The owner of the Grangemouth petrochemical plant is to close the operation but keep the major oil refinery amid a bitter dispute with staff over pay and conditions.

The move is understood to threaten up to 800 jobs at the petrochemicals business and owner Ineos said it would be keeping closed the refinery, which provides most of Scotland's fuel, until the threat of industrial action was removed.

Workers were given the news at a meeting with Ineos petrochemicals chairman Calum MacLean following the passing of a deadline on a survival plan put to employees which asked them to accept changes to pensions and other terms and conditions.

The Unite union said around 680 of the site's total 1,370-strong workforce had rejected the company's proposals, which included a pay freeze for 2014-16, removal of a bonus up to 2016, a reduced shift allowance and ending of the final salary pension scheme.

Unite has accused the company of playing "Russian roulette" with the future of Grangemouth, the biggest industrial site in Scotland, and is backing any efforts by the Scottish Government to find a new buyer for the petrochemical complex.

In a statement, Ineos blamed the union's opposition to its survival plan for the decision to close the petrochemical plant - saying shareholders could no longer fund it.

Mr MacLean said: "This is a hugely sad day for everyone at Grangemouth. We have tried our hardest to convince employees of the need for change but unsuccessfully.

"There was only ever going to be one outcome to this story if nothing changed and we continued to lose money.

"We still struggle to comprehend what has happened here. The employees were offered a chance to secure substantial new investment in the company, preserve their jobs and keep their salaries. Sadly this will no longer be the case."

The company added: "As a result of this decision, the directors of the petrochemicals business have had no option but to engage the services of a liquidator. It is anticipated that a liquidation process will commence in a week."
 
Seems the refineries are struggling, Coryton the other year and is Lindsey still up for sale. Bad news
 
Its simple economics,no business can sustain financial losses indefinitely,a rescue plan was put in place so the plant could continue and jobs safegaurded,however this was rejected by the union and it's members,go figure??most people have no annual wage rises,specially in our industry,now everyone's losing their jobs because of hardball unions,and there's me thinking Maggie had squashed them in the 70's and 80's,still a shame to see it all end in tears though:sad:
 
This is a nightmare scenario for Scotland. I feel for the people who have just been brushed aside by a guy who is a billionaire and spends his time on a £125m yacht for his pleasure.
 
rustyspanner said:
This is a nightmare scenario for Scotland. I feel for the people who have just been brushed aside by a guy who is a billionaire and spends his time on a £125m yacht for his pleasure.
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There will always be rich and poor in life and it will never change, if he sold his yacht Grangemouth would get another 10 months, if the staff had accepted the deal instead of following unite it may have got 10 years.
 
Source Douglas Fraser, BBC Business & Economy Editor, Scotland



Owners Ineos have announced that the petrochemical plant at the giant Grangemouth complex in central Scotland is to close. The neighbouring refinery will remain open.
About 800 people are directly employed by the petrochemical plant, with more employed as sub-contractors.



What's the problem with the petro-chemical plant at Grangemouth?

Grangemouth's petro-chemical plant has used the by-products from refining oil across the road at the refinery. That's been used to manufacture a wide range of products, including plastics and pharmaceuticals.


The oil coming down the pipeline from the Forties network in the North Sea has less of the ethane content, meaning the petro-chemical plant has been operating at less than 60% of capacity.


To source new gas 'feedstock', Ineos planned to import it from the US, where the shale gas boom has driven down prices. It said earlier this month that its 'survival plan' would require more than £300m of Ineos investment to re-equip the Forth Valley plant.



The firm also said it would require government loan guarantees and big cuts in costs, primarily the pay and pensions of the refinery and petro-chemical plants' joint workforce of 1,370. Without that agreement, it said the petro-chemical plant would close by 2017.


How has this industrial dispute led to closure?

Unite, the trade union, started industrial action 16 days ago over a separate dispute involving alleged victimisation.


It then gave notice of a 48-hour strike from Sunday to Tuesday. Management responded by shutting down the plant. There were talks last week at arbitration service Acas. They broke down, but the union withdrew its strike threat.


Ineos moved swiftly to require staff to accept changes to their contracts. The union urged members not to accept but to demand a return to negotiations. Two-thirds of Unite members took that advice, or half of the total workforce.


Ineos said on Wednesday morning that the union response led it to close the plant, much faster than it had previously indicated. Liquidators are to be appointed within a week.


Could it have a future?

There may still be value to the assets, though Ineos recently reduced its asset valuation from nearly £400m to zero, saying there is no realistic prospect of future profit.



A liquidator could seek a buyer. What that buyer would require is necessary funds for re-equipping it. It would have to source the feedstock, probably from the USA
.
If Ineos figures are correct, it would also require a lower cost base, so similar problems of reduced pay and pensions could arise, without industrial relations tensions being resolved.


Could it be nationalised?

The Scottish government has become involved in trying to find a buyer for Grangemouth, ahead of the decision on petro-chemical closure. It hasn't ruled out the possibility of taking over the plant itself.


Neither ministers nor the civil service have expertise in running a complex petro-chemical plant, and would have to appoint an operator, and pay for it. It would also have to find funds for investment, when its capital budget is already severely squeezed.



If Ineos's figures are correct, the Scottish government would face losses for the foreseeable future. It would also have to address the industrial relations challenge.


What future for the refinery?
The finances of the neighbouring refinery have been helped by selling feedstock to the petro-chemical plant. Without that outlet for its by-product, it will have to flare off excess gas, losing income and raising issues about excessive emissions.


It could seek to ship out its by-products, but transportation would raise costs, and would be in competition with American shipments. On them, Ineos says gas is available at quarter of the European price.


Jim Ratcliffe, the boss of Ineos, has warned that if the petro-chemical plant closes, then it is likely to lead to the demise of the refinery as well.


The refinery market is suffering from significant global over-capacity, with more new refineries being built in the Middle East and Asia. They are more efficient and better suited to modern demand patterns for diesel instead of the high petrol output for which older European refineries were designed.


There have been several recent refinery closures across Europe, where owners have been unable to find buyers. The big oil producers have been exiting the market for both refining and petro-chemicals over recent years, because they get better return on their capital from focussing on upstream exploration and production.


So the buyers for assets such as Grangemouth are more likely to be strategic investors, taking the long view. One of them could be PetroChina, which has 49.9% ownership of the refinery. (It's pointing out that the majority lies with Ineos, and therefore the decision on its future lies there too.)


However, state-controlled PetroChina has made colossal losses on its refining in recent years, and its management are focussed on handling a major corruption scandal in China.
 
I think it will only get worse for the oil refineries, cars are simply going further on less fuel. I read the government coffers were down 13 billion on fuel duty they put down to cars getting more fuel efficient.
 
Yep I can see a new tax coming in based on yearly mileage. We wouldn't want HMRC to be down on taxes :(
 
whats behind the dispute is THE PENSION plan that Ineos inherited from BP

as a contractor on these sites i have always found that many not all of the plant employees do treat the contractor with at worse Contempt,and at best Ignorance.The same guys who will not cross a picket line they have set up.
I hope there can be some sort of resolve for the workers as it would be a big blow to the Area. ;)
 
Was Reading In The Sunday Herald About This Scumbag, His Company Has Not Paid A Penny In Tax For Years (If Ever) And As For The Usual No One Has Had A Pay Rise For Years Brigade, Just Wait Till Your Rights And Conditions Are Either Under Threat Or Gone. This Is Not A Union Picking A Fight Here Gents, This Is A Swiss Based (Theres The Tax Thing Again) Management Saying To A Highly Skilled And Profitable Workforce Do As We Tell You Or We Will Close You Down (No Acas, No Dialogue.) Its Not About A Payrise Folks Its About Looking After Your Terms And Conditions.
 
stand an be counted on principle the same happenign with the fire services police every 4 years or so they change the pension plans etc but this time they are trying to get all the boys on the newest pension plan and the old timers who pension are just about to pay off are looking like there goign to lose big time if they get changed on to the new plan. just change the feking things for new starters simples
 
Gerscaff said:
Was Reading In The Sunday Herald About This Scumbag, His Company Has Not Paid A Penny In Tax For Years (If Ever) And As For The Usual No One Has Had A Pay Rise For Years Brigade, Just Wait Till Your Rights And Conditions Are Either Under Threat Or Gone. This Is Not A Union Picking A Fight Here Gents, This Is A Swiss Based (Theres The Tax Thing Again) Management Saying To A Highly Skilled And Profitable Workforce Do As We Tell You Or We Will Close You Down (No Acas, No Dialogue.) Its Not About A Payrise Folks Its About Looking After Your Terms And Conditions.
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. Apparently making a 10 million pound a month loss , not sure how much tax you pay on a loss
 
making a loss is what these companies who evade Taxes tend to do.
THEY THREATENED CLOSURE LAST WEEK IF THE PLANNED STRIKE WENT AHEAD
THE STRIKE WAS CANCELLED
they also wanted loan guarantees of £180 million from the government so they could invest £300 million why would you do that in a plant that is loosing £10 million a month
The pension plan is meant to be in £200 million deficit WHICH PROBABLY WENT TITS UP DUE TO THE BANKING COLLAPSE.
the whole thing stinks and Ineos are nothing but a devious shower of shiite in the way they have renaged onn the ACAS process:mad:
If they get away with this it will set a precedent in other big sites
 
Gerscaff said:
Was Reading In The Sunday Herald About This Scumbag, His Company Has Not Paid A Penny In Tax For Years (If Ever) And As For The Usual No One Has Had A Pay Rise For Years Brigade, Just Wait Till Your Rights And Conditions Are Either Under Threat Or Gone. This Is Not A Union Picking A Fight Here Gents, This Is A Swiss Based (Theres The Tax Thing Again) Management Saying To A Highly Skilled And Profitable Workforce Do As We Tell You Or We Will Close You Down (No Acas, No Dialogue.) Its Not About A Payrise Folks Its About Looking After Your Terms And Conditions.
Click to expand...

Gers,it's standard stuff that multinationals have their registered business's in low tax country's,no big company in their right mind would willingly pay our exhorbitant tax rates,nor could they compete or survive doing so,but that's an issue for our goverment's tax rules,i doubt a profit making organisation would take the drastic step of putting itself into administration,and nor could it,unless it was losing money hand over fist,loss making company's cannot hand out pay rises annually nor honour generous pension plans when the future trade of that particular company in a british economy that cant compete on the global stage is in dire straights,it's a very romantic view to believe that any company,be it large or small,can pay out more than it brings in,and the workforce that believe they have a god given right to benefits they think the company are holding back on them need to get in the real world,it's easy to hand out pay rises and bonus's and other benefits in times of boom,but nigh on impossible to withdraw under economic hardship,the unions should be well aware of this and should advise their members accordingly,instead of trying to find middle ground and a possible resolution,they take it to the wire and end up in this dire situation,unfortunately worker power and all that doesn't always work in the favour of the common man,nothing personal you understand,just my opinion;)
 
BF i understand your sentiments BUT the workers never decided to take industrial action FOR A WAGE RISE.They backed their steward as they felt he was being victimised.Then the company told the work force give up your pensions and other rights or we shut the petrochem part of the Plant.
Ineos have plants in Germany DO YOU THINK THEY WOULD TRY THIS SHIIT OVER THERE
I THINK NOT:mad:
 
happyhugenoet said:
BF i understand your sentiments BUT the workers never decided to take industrial action FOR A WAGE RISE.They backed their steward as they felt he was being victimised.Then the company told the work force give up your pensions and other rights or we shut the petrochem part of the Plant.
Ineos have plants in Germany DO YOU THINK THEY WOULD TRY THIS SHIIT OVER THERE
I THINK NOT:mad:
Click to expand...

I read it as they voted against no pay rise for a couple of years and a reduced pension,which left the parent company with no other choice,i don't know about any steward being victimised??so your saying it's down to an argument with a steward rather than huge financial losses??conspiracy theory's abound eh,my comments were not aimed at the unfortunate employees that will lose their livelyhoods,more at the the economic reality's of this sorry affair,anyway happy,please enlighten us on this steward affair!!
 
it all started a couple of weeks ago when they suspended the steward saying he had been using their database for recruiting for Labour Party membership.The workforce werent happy with his treatment and balloted for strike.The company then started the CLOSURE threat unless the strike was called off,and it was called off.ACAS got involved but its ended up in the mess its at now.

Its a lot of workers and a whole community but as you say these multinationals dont give a flying feck
Hopefully it can all be resolved;)
 
happyhugenoet said:
making a loss is what these companies who evade Taxes tend to do.
THEY THREATENED CLOSURE LAST WEEK IF THE PLANNED STRIKE WENT AHEAD
THE STRIKE WAS CANCELLED
they also wanted loan guarantees of £180 million from the government so they could invest £300 million why would you do that in a plant that is loosing £10 million a month
The pension plan is meant to be in £200 million deficit WHICH PROBABLY WENT TITS UP DUE TO THE BANKING COLLAPSE.
the whole thing stinks and Ineos are nothing but a devious shower of shiite in the way they have renaged onn the ACAS process:mad:
If they get away with this it will set a precedent in other big sites
Click to expand...

The instinct to blame antagonistic – and incompetent – trade union officials for the devastating news that Ineos is to close its petrochemical plant in Grangemouth is understandable. After all, the company has been warning for some time of losses at the complex of £10 million a month.
These figures demanded action to stem the financial haemorrhage. And, in those circumstances, Unite’s refusal to accept new conditions for its members was always a risky strategy.
It was clear last week – when Ineos temporarily closed down its entire Grangemouth complex, where it employs 1,600 people in the petrochemical plant and adjacent oil refinery – that the company was in no mood to compromise with the union, which had already threatened strike action over plans to freeze pay and cut pensions.
But while the union may have read the situation badly, it would be wrong to hold it entirely responsible for Ineos’s announcement this morning that it was to put the plant into liquidation.
It appears clear that Unite’s foolishness has collided with Ineos’s brutal intransigence, with potentially catastrophic consequences.
Around 800 people will be affected by the closure of the plant, but every one of those 1,600 jobs is at risk while the Grangemouth complex remains shut down.
Ineos has said it will take a decision on the future of the refinery once Unite has agreed to remove, permanently, the threat of strike action. Holding all the cards, now, Ineos doesn’t view the union as a force with which to negotiate but as a facilitator of redundancies.
Scotland’s First Minister Alex Salmond said today’s announcement was ‘hugely disappointing’ and made the usual, necessary promise to work with both sides to find a solution. But, as gifted a politician as he is, Salmond has little power, here. Ineos is unlikely to be moved by the First Minister’s emergency cabinet meetings and furrowed-brow statements. The company wants to stop losing money and it will damned well do so regardless of what Unite or Salmond may say.
This crisis began some weeks ago when Ineos launched an investigation into the activities of employee Stephen Deans, a Unite official who was involved in a controversial process to select a Labour candidate for the Falkirk parliamentary seat currently held by Eric Joyce. That disciplinary procedure may have been the catalyst for the stand-off between bosses and workers but these jobs would have been at risk, regardless.
Unite provided the opportunity for Ineos to take action that was always on the cards and, at the same time, blame unthinking, unbending trade unionists.
Those officials may not have served their members wisely, they may have hardened managerial resolve to deal with the losses at Grangemouth swiftly and without sentiment.
But while those losses kept on keeping on, it was a question of when, not if, Ineos would swing the axe.


 
Grangemouth

Who gives a flying f-ck i work in the chemicals and some of these lazy scaffs with hertel who i work for deserve the boot,me ill just get transfered elsewhere good riddens too bad rubbish half them english ***** are taking goos scotsmans jobs,get back to where you belong
 
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