By a Newsnet reporter
The Grangemouth oil refinery has “shut down and will remain shut down” according to owners Ineous. This company issued the statement despite the Unite union calling off a proposed 48 hour strike planned for Sunday.
Both sides in the dispute had taken part in 16 hours of negotiations with conciliation service Acas.
The dispute arose over planned restructuring of the plant and bitter disagreement over the treatment of a local union convener, Stephen Deans.
Talks broke down in the early hours without resolution. Unite has accused the company of “walking away” from the talks and described their behaviour as “scandalous”.
Unite Scottish secretary Pat Rafferty is now pessimistic about prospects for resolution:
“We are outraged that Ineos representatives walked away from Acas talks, after sixteen hours of negotiation and on the cusp of an agreement, for the ludicrous reason that Ineos chairman Jim Ratcliffe instructed his management representatives to demand an apology on his behalf,
“It is absolutely incredible that the future of this site, its workforce – both permanent and contracted employees – and the national interest has been totally compromised by one man’s out of control ego.”
Mr Rafferty explained that the strike had been called off “in order to protect this national asset” and stressed that the “plant should now start the return to full production,”
But in a statement released by the company, Ineos stated: “Grangemouth is shut down and will remain shut down. Grangemouth is financially distressed. The industrial action called by Unite the Union has inflicted significant further damage on the company.
“Ineos will put a proposal to the workforce tomorrow and expects a response on Monday, after the weekend. The company will review its position with its shareholders on Tuesday.”
Ineos has given assurance that the steam line to Kinneil is being maintained, and that processes are in place to replace stocks lost through the refinery shut down. This means there should be no impact on the availability of fuel at the forecourts.
Reports in the media have suggested that the dispute has been caused by the scandal over a Labour candidate selection process in Falkirk. But sources close to the dispute have told Newsnet Scotland that this is a smokescreen and that Ineos is using it in order to drag the dispute out.
Mr Deans was involved in a dispute between the union and the Labour Party over the selection of a candidate to replace disgraced former Labour MP Eric Joyce. Deans was suspended by Ineos but later re-instated and now faces an internal investigation by the company.
Newsnet Scotland understands that the company suspended Mr Deans over alleged phone calls made to the Labour party whilst the Unite official was on site.
Speaking yesterday, Conservative MP Robert Halfon attacked the union and warned that a strike could push up fuel prices across the country.
He said: “Unions are supposed to care about the cost of living. Why are they threatening to close an oil refinery?
“This could hit petrol and diesel prices causing misery for millions of hard-pressed motorists. It’s an internal dispute. It shouldn’t lead to a strike action. They should think again.”
However, with the union having called off their strike, pressure will now fall on the refinery owners to offer a reciprocative move. Their initial response suggests they are as yet unwilling to compromise.
Ineos has stated that the Grangemouth plant is losing £10 million a month and will close in 2017 unless investment is attracted and cost-cutting takes place.
Union members worry that the Deans episode and subsequent shut down (despite the calling off of the planned strike) will be used to force through cuts to wages and conditions, and to leverage tax payer investment from the government.
Commenting on the move by Ineos to temporarily shut Grangemouth refinery and petro-chemical plant, the First Minister Alex Salmond said:
“The Scottish Government will continue to assist with talks and impress the importance of a resolution upon both management and Unite. Grangemouth has a long-term future as a successful petrochemical site in Scotland but this will only be possible if underlying issues with management and unions are resolved.
“Governments themselves cannot force or compel agreement between unions and management – they have to do that for themselves. We can impress upon both sides the importance of this facility to Scotland, and that is what we will continue to do.
“As things stands, there is no threat to fuel distribution or the Forties pipeline. But what is important – and what now is at stake – is the future of Grangemouth as a chemical complex and a refinery in Scotland, and that can only be brought about by investment in the plant. The Scottish Government is happy to assist with such an investment package, but before that can happen there needs to be goodwill on both sides between management and the unions.”