Grangemouth dispute: Ineos says petrochemical plant will close

BlondeHeadOn

I can't believe this isn't on here yet, or are we not discussing the Scottish economy any more?

http://www.bbc.co.uk/news/uk-scotland-24631342


From the Douglas Fraser Analysis insert down the side:

"The closure of the petro-chemical plant puts the refinery at risk, and is a major blow to many manufacturers in which the plants have been a vital part of the supply chain.

Official figures today showed refined oil and chemicals were one of the main drivers of growing Scottish exports this year. That sector, in which Grangemouth has been dominant, was worth £3.7bn last year.

If much of that is thrown into reverse, with imports required instead of exports earnings, it will have a significant impact on the cost of sourcing materials from elsewhere, and potentially on the UK's trade figures.

Among other big questions that arise: what, if anything, is the government doing about security of refining supply?"


I sense a bit of bluff-calling here, but it's very sad news.

Will this have an impact on the Independence debate, as well as the UK economy?

chewmylegoff

Good old unions, have probably cost a couple of thousand people their jobs with a bit of pointless posturing. Still the union officials will be ok, will probably award themselves bonuses for a job well done.

Kennyboy66

BlondeHeadOn wrote: »

I sense a bit of bluff-calling here, but it's very sad news.

Will this have an impact on the Independence debate, as well as the UK economy?

Doubt it will have any impact on independence vote.

The pension scheme accrues at 1/60 of final salary with workers paying 2%. Pretty sure it was still open to new employees (as a result of industrial action in 2008).

I'd have thought that Unite should be happy that they kept a final salary scheme going this long - however they haven't covered themselves in glory this time.

Dire news - but looks like the Union (and its members) largely to blame.

I haven't seen any offers to reduce costs on their part.

Graham_Devon

chewmylegoff wrote: »

Good old unions, have probably cost a couple of thousand people their jobs with a bit of pointless posturing. Still the union officials will be ok, will probably award themselves bonuses for a job well done.

It's not the unions that have "cost people their jobs".

If the plant isn't profitable, as the company allures to, then it would have gone anyway, regardless of the unions.

If the only way for it to stay profitable is to reduce contractual benefits to it's staff, then it's not exactly stable, so again, it would likely have gone without the unions objecting (just kept going for a while more).

As it is, there are many rumours that a bluff is being called here. The politics is intense and some have suggested that the company are hoping for a taxpayer bailout for which, in turn, people will keep their jobs.

Personally? Sounds like a lot of games, for which I'm sure the company would be delighted should the outcome be that we blame the employees.

Quite a few voices have stated there was a wry smile on the face of the person making the announcement to staff....as if the company had beaten them after daring to go on this long.

Very difficult to simply blame employees and the unions.

Think theres more yet to come on this one, dependant upon the pressure that can be applied politically.

It may well the the unions that are to blame. But it may not be. At the moment, it seems both sides are still arguing...but the point that the plant appears to be losing £10m a month suggests there are issues anyway, without the unite issues.

Edit: and a slight update has happened even since I read this morning. The government is now considering stepping in with a business plan. Therefore, if the company were being clever and holding a ransom of sorts (not saying they are, just looking at all the options) it looks as if they may well be getting somewhere.

The company has also stated it may "consider" re-opening if the emplyees agree not to go on strike and accept conditions.

To me, it looks more and more as if this is a dirty game of power.... "do as we say, or you lose everything".

BlondeHeadOn

I too got the sense that the unions had played right into the company's hands here. My sense was that the company pressed the changes to the point where they could make out that it was all the employees/unions fault that the plant had to close. Then wait and hope that the government offers some kind of bailout. And if not, just walk away whistling.

Or am I being too cynical.....

As Graham_D says, the politics are intense.

Kennyboy66

Graham_Devon wrote: »

It's not the unions that have "cost people their jobs".

If the plant isn't profitable, as the company allures to, then it would have gone anyway, regardless of the unions.

If the only way for it to stay profitable is to reduce contractual benefits to it's staff, then it's not exactly stable, so again, it would likely have gone without the unions objecting (just kept going for a while more).

Blimey, are there still people out there who think that final salary pensions (and the Grangemouth one is gold plated) are anything other than ruinously expensive.

You are asking companies to sign a blank, unlimited cheque for each member.

Unions (and their members) are about to be taught a painful lesson, one that will eventually be taught to the public sector.

wotsthat

Graham_Devon wrote: »

To me, it looks more and more as if this is a dirty game of power.... "do as we say, or you lose everything".

Well it looks as if the union's bluff has been called and the company would rather shutdown than invest further.

Can't have been an easy decision to make given the scale of the fixed assets. Losing £10m/ month and dealing with a union lost in the '70's can only have made the decision easier.

Some pretty upset people leaving work today on the news - to a man I bet they'd take a pay cut and see the end of the final salary pension. They must wonder why they bothered paying union subs.

chewmylegoff

Graham_Devon wrote: »

It's not the unions that have "cost people their jobs".

If the plant isn't profitable, as the company allures to, then it would have gone anyway, regardless of the unions.

If the only way for it to stay profitable is to reduce contractual benefits to it's staff, then it's not exactly stable, so again, it would likely have gone without the unions objecting (just kept going for a while more).

As it is, there are many rumours that a bluff is being called here. The politics is intense and some have suggested that the company are hoping for a taxpayer bailout for which, in turn, people will keep their jobs.

Personally? Sounds like a lot of games, for which I'm sure the company would be delighted should the outcome be that we blame the employees.

Quite a few voices have stated there was a wry smile on the face of the person making the announcement to staff....as if the company had beaten them after daring to go on this long.

Very difficult to simply blame employees and the unions.

Think theres more yet to come on this one, dependant upon the pressure that can be applied politically.

It may well the the unions that are to blame. But it may not be. At the moment, it seems both sides are still arguing...but the point that the plant appears to be losing £10m a month suggests there are issues anyway, without the unite issues.

Edit: and a slight update has happened even since I read this morning. The government is now considering stepping in with a business plan. Therefore, if the company were being clever and holding a ransom of sorts (not saying they are, just looking at all the options) it looks as if they may well be getting somewhere.

The company has also stated it may "consider" re-opening if the emplyees agree not to go on strike and accept conditions.

To me, it looks more and more as if this is a dirty game of power.... "do as we say, or you lose everything".

It was losing £10m a month. The company was prepared to invest £300m - presumably to improve the facilities, machinery etc and make the plant more efficient - but as part of that commitment it needed to reach an agreement to cut costs as presumably future profitability was dependent on both reducing costs and investing in updating the plant.

Unions instructed staff to vote against as the thought they could get a better deal. They seem to have dramatically misjudged the situation (assuming the company's decision to close is genuine). If they had voted in favour everyone would still have their jobs. How is that not the union's fault?

chewmylegoff

BlondeHeadOn wrote: »

I too got the sense that the unions had played right into the company's hands here. My sense was that the company pressed the changes to the point where they could make out that it was all the employees/unions fault that the plant had to close. Then wait and hope that the government offers some kind of bailout. And if not, just walk away whistling.

Or am I being too cynical.....

As Graham_D says, the politics are intense.

Why does the company need to make it look like the union's fault when they could just take a unilateral decision to close the plant at any time. They could have said "we're making £10 million a second but we have decided we don't want to, so we're shutting the plant and making you all redundant" then they could have bulldozed the site and refused to sell it to anyone as a going concern and no-one could have done a thing about it.

Loughton_Monkey

Graham_Devon wrote: »

.......Very difficult to simply blame employees and the unions.

........To me, it looks more and more as if this is a dirty game of power.... "do as we say, or you lose everything".

It's extremely easy to blame the employees and the unions. Not least because it is they that are responsible for losing their own jobs.

Power is not the driver here. Making a profit is the driver, and if the owners do not have the right to set the terms then who has? They are not a charity. Small businesses have to do this every day. "I can't afford you. If you take a 10% cut in salary, I can stay open.... otherwise the bank are about to foreclose on my mortgage....." It's tough. But it's life.

The irony is, most of the staff will eventually find new jobs, but at terms less than they were being offered. I think they are too stupid to have worked that out. If I said I sympathised for this self-inflicted financial injury for one second, I would be exaggerating.

chucknorris

Surely there is an easy solution to this problem. The unions buy out the existing business and then give the workers what they want and maintain profitability for the shareholders, win win situation, job done!

Next week I will be looking at solving the Syria problem.