Photograph by Paul McIlroy
Ineos has announced that the petrochemical plant at Grangemouth will close after workers rejected a deal that included a pay freeze and pension downgrades.
The statement was made by Ineos following a meeting with the workers at the plant and oil refinery complex in central Scotland. The company have said that a decision will be made about the possible reopening of the refinery once the “threat of strike action” had been removed.
Grangemouth has been shut for a week because of a dispute that begun about the treatment of Unite union convenor Stephen Deans who was suspended and then reinstated and faces further investigations about the selection of a Labour candidate in Falkirk. The situation then developed into a wider dispute about the entire site, with Ineos warning the workers that the site would be closed unless they accepted a pay freeze and downgrading of pensions. They claim to be losing £10 million per month with the site closed and were ready to invest £300 million in the site of teh workers accepted the new terms. However, the 1,350-strong workforce rejected the offer in a 50/50 split.
Liquidators will be appointed for the petrochemical plant within a week, and it is likely that if the plant does not reopen, the refinery would also be closed.
In a statement about the closure, the company said:
Following the breakdown of the ACAS talks last week and Unite’s refusal to provide a no strike guarantee, the company decided to approach the employees direct.
Employees were asked to support the changes necessary to save the business. Management held direct meetings with all employees to explain the very serious nature of the problem.
The company made it clear that rejection of change would result in closure. Regrettably, the union advised union members to reject any form of change.
The outcome of the employee vote on the company’s Survival Plan was a 50/50 split.
Within this, almost all of the administrative staff voted for the company’s plan but a large majority of shop floor employees voted to reject it.
The shareholders met yesterday to consider the future of the business following the result of the employee vote.
Sadly, the shareholders reached the conclusion that they could not see a future for Grangemouth without change and therefore could no longer continue to fund the business.
Ministers are meeting in London to determine a response to the closure of the plant and refinery which provides most of the fuel for Scotland, Northern Ireland, and the north of England. It will have a major impact on local communities, with around 800 people directly employed at the plant and more employed as sub-contractors.
Energy secretary Ed Davey said:
While respecting INEOS’ right to make this decision, it is regrettable that both parties have not managed to negotiate a fair and equitable settlement that delivers a viable business model for the plant.
Even at this late stage, I urge INEOS to continue dialogue with the workforce, and Government will offer help and support with this.
Michael Connarty, the Labour MP whose constituency includes Grangemouth, along with Scottish finance secretary John Swinney have said that they are hopeful that a buyer could be found for the site, although no company has yet come forward.
Ineos recently moved it headquarters to Switzerland to Switzerland to avoid paying UK taxes, reportedly after struggling to pay its UK VAT bill, and a bail-out will not be offered by the UK government, which stressed it was a “privately owned” facility.
