Grangemouth picks up the pieces
2 Jun 2008
Ineos has signalled progress with proposals to end its pensions dispute with the Unite trade union. The apparent breakthrough came too late to prevent a 48-hour strike by 1,200 staff at its Grangemouth site that has knocked out the refinery and petrochemicals complex for at least three weeks. It has also closed BP's Forties pipeline, which provides 30% of the UK's North Sea oil supply.
The Scottish site was shut down for safety reasons a week before the the strike on 27-29 April. The restart operation was expected to take two to three weeks to restore production to normal operating levels.
"This is the first time we have ever shut the plant so this is really new territory for us," said an Ineos spokesman. "Safety is the priority, so there are a lot of checks to be carried out. As an integrated site, plants also rely on receiving on-spec feeds from other on-site facilities."
The damage to industrial relations at Ineos could take significantly longer to repair after weeks of increasingly bitter argument between the two sides.
The strike was over pension benefits, Ineos claiming that the present scheme currently absorbs over 25% of money spent on Grangemouth employees and could rise to almost 50% in future - making the complete operation uncompetitive.
Ineos proposed a 6% employee contribution, phased in over the next six years. Future new employees would have to fund their pensions, though, said Ineos. Its typical salary package for a qualified technician is still highly attractive at almost £60,000 a year. Just prior to the strike, Ineos offered to suspend changes to the existing workforce pension, pending review, but this offer was rejected by Unite.
For its part, Unite accused Ineos of stripping £40 million of assets from the employee pension scheme - a claim subsequently withdrawn under the threat of legal action from Ineos. The union also claimed that the pension scheme required only £16 million a year employer funding and that Ineos had already started reducing its contributions to the scheme.
Linda McCulloch, Unite national officer said: "Ineos is proposing to make changes to its pension scheme that will reduce our members' pension pay-outs by an average £10,000 per year." The scheme is affordable and well funded, she claimed, adding that Grangemouth makes up to £3 million profit a day.
The Scottish site was shut down for safety reasons a week before the the strike on 27-29 April. The restart operation was expected to take two to three weeks to restore production to normal operating levels.
"This is the first time we have ever shut the plant so this is really new territory for us," said an Ineos spokesman. "Safety is the priority, so there are a lot of checks to be carried out. As an integrated site, plants also rely on receiving on-spec feeds from other on-site facilities."
The damage to industrial relations at Ineos could take significantly longer to repair after weeks of increasingly bitter argument between the two sides.
The strike was over pension benefits, Ineos claiming that the present scheme currently absorbs over 25% of money spent on Grangemouth employees and could rise to almost 50% in future - making the complete operation uncompetitive.
Ineos proposed a 6% employee contribution, phased in over the next six years. Future new employees would have to fund their pensions, though, said Ineos. Its typical salary package for a qualified technician is still highly attractive at almost £60,000 a year. Just prior to the strike, Ineos offered to suspend changes to the existing workforce pension, pending review, but this offer was rejected by Unite.
For its part, Unite accused Ineos of stripping £40 million of assets from the employee pension scheme - a claim subsequently withdrawn under the threat of legal action from Ineos. The union also claimed that the pension scheme required only £16 million a year employer funding and that Ineos had already started reducing its contributions to the scheme.
Linda McCulloch, Unite national officer said: "Ineos is proposing to make changes to its pension scheme that will reduce our members' pension pay-outs by an average £10,000 per year." The scheme is affordable and well funded, she claimed, adding that Grangemouth makes up to £3 million profit a day.
