Grangemouth dispute: Ineos to close petrochemicals plant

GRANGEMOUTH, SCOTLAND - OCTOBER 22:  Workers at the Grangemouth refinery and petrochemicals plant on October 22, 2013 in Grangemouth, Scotland. Ineos who operate the oil refinery are set to hold a meeting with shareholders to decide the future of the plant, following over half the workers rejecting new terms and conditions.  (Photo by Jeff J Mitchell/Getty Images)
GRANGEMOUTH, SCOTLAND - OCTOBER 22: Workers at the Grangemouth refinery and petrochemicals plant on October 22, 2013 in Grangemouth, Scotland. Ineos who operate the oil refinery are set to hold a meeting with shareholders to decide the future of the plant, following over half the workers rejecting new terms and conditions. (Photo by Jeff J Mitchell/Getty Images)

Part of the giant Grangemouth site is to close following a bitter row over pay and conditions.

Owner Ineos has decided to shut down the petrochemical side of the complex, which is next to the firm’s oil refinery.

Workers were given the grim news at a 10am meeting with Ineos chairman Calum MacLean. The decision is expected to result in hundreds of job losses.

The news follows 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 1,370-strong workforce had rejected the company’s proposals, which include 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.

Today, Ineos said: “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 … 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.””Hugely sad day”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.

“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.”

Mr MacLean also hinted that the future of the entire refinery could be at risk if the dispute continues.

“Petroineos will now decide on whether to restart the refinery. This will be primarily dependent on the removal of the threat of further industrial action,” he said.

MrMacLean added: “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.”

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 oil refinery and petrochemical complex.Emergency Scots cabinet meetingAlex Salmond said he is convening an emergency cabinet meeting to discuss the situation.

He said: “This announcement by Ineos is hugely disappointing. It is, however, the position we always feared as it became apparent that the stalemate was not going to be broken.

“It has been a growing danger since the plant was shut down last week and the emergence of a virtual deadlock between workers and management over the weekend.

“This is the outcome that matches our worst fears, which is why we urged getting the plant fired up instead of lying cold.

“I will be speaking again to management and unions today to try and seek any further resolution we can. I will also convene an emergency cabinet meeting with relevant ministers later today to discuss the ongoing situation.””Disappointing outcome”Prime Minister David Cameron’s official spokesman said: “This is a disappointing outcome. We would continue to urge both parties who have been involved in the dispute to try to find a way to continue their dialogue.

“The right thing to do is for the Government to offer its help and support in that process.Even at this stage we hope that a way forward could be found.”

Asked whether there was a possibility of the plant being nationalised, the spokesman replied: “No.””Industrial blackmail”Grahame Smith, Scottish Trades Union Congress (STUC) general secretary said: “The behaviour of Ineos is simply disgusting and it reveals the true nature of a feral private equity concern that clearly believes it has no social obligations whatsoever….

“When the stability of the economy was threatened by the failure of RBS and HBOS, government was quick to act.

“Now when the stability of the Scottish economy is threatened by the industrial blackmail tactics of Ineos, government must again find the will to act.”For full coverage of today’s events, and the possible implications, see Thursday’s Courier.

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