“D-Day” for Grangemouth

Despite the Unite union yesterday calling off its planned 48-hour strike, Ineos has refused to restart the plant, which it shut down in anticipation of this weekend’s planned industrial action.

The petrochemicals firm said Grangemouth was “financially distressed” and would remain shut down until negotiations with its employees over pensions, which have begun today, had been concluded.

The site lost over £576 million in the last four years and is currently losing over £10 million per month. The pension scheme is £200 million in deficit and pension costs are 65% of salary. Ineos claims the recent dispute over union site representative Stephen Deans and the subsequent shutdown has added a further £20 million to these costs, causing shareholders to express “extreme concern”.

The company has committed to investing a further £300 million in the site

INEOS Grangemouth (UK) chairman Calum MacLean

“This is D Day for Grangemouth,” said INEOS Grangemouth (UK) chairman Calum MacLean.

“The site is safely closed whilst we consult the workforce. If we can get the changes we want, the company has committed to investing a further £300 million in the site which will help secure its long term survival.”

The changes being proposed by Ineos, as outlined in its survival plan for Grangemouth, include:

• a money purchase pension scheme to replace the final salary scheme
• a transition payment for pension change of between £2,500 and £15,000 depending on service
• maintaining employees’ top quartile salary (typically £55,000 per year)

Ineos is making the proposals directly to the workforce due to its relationship breaking down with the union over the recent dispute. The proposals also suggest that Grangemouth’s employees “have a more modern approach to work place representation”.

The company only wants to break the union

Unite regional secretary Pat Rafferty

Unite today responded by pouring scorn over Ineos’ claims of financial hardship, claiming the firm simply was trying to “break the union”.

It accused Ineos of using ‘fancy accounting manoeuvres’ and claimed that an analysis of Ineos accounts by tax experts show that Ineos ‘Chemicals’ expects to make profits of £500 million in the coming years. Unite also claimed the accounts show that labour costs including pensions account for just under 17% of total turnover and that the pension fund actually made a gain of £7.2 million in 2012.

“Ineos expects to make profits of half a billion pounds in the coming years, blowing a massive hole in the company’s claims that there are serious financial difficulties at its site in Grangemouth Scotland,” said Unite regional secretary Pat Rafferty.

“This leads us to believe that the company only wants to break the union and is using the innocent Stephen Deans and claims of financial hardship to do so.”