Engineering news
The petrochemical side of the giant Grangemouth site is to close following a bitter row over pay and conditions, with the loss of hundreds of jobs.
Owner Ineos said it had made the decision after workers were split 50/50 on a survival plan for the site, which included accepting a pay freeze and changes to pensions and other terms and conditions.
Workers were given the news at a meeting with Ineos chairman Calum MacLean, and left expressing shock at the move. Management, however, expressed frustration that the deal it had offered, which it claimed would have secured the plant's future, had been rejected.
Grangemouth and its refinery is regarded as strategically important to the UK. In another blow to Scottish industry, chemicals giant BASF was set to announce it is closing its pigment plant in Paisley, Renfrewshire, as part of an overhaul of its global operations, according to reports. The move comes only three years after the German company cut two-thirds of jobs at the site, claiming at the time that this would provide a more sustainable future.
Ineos is a $42 billion privately-owned chemicals group headquartered in Switzerland. Trade union Unite has accused the company of playing “Russian roulette” with the future of Grangemouth. The 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. Shopfloor staff were said to have been especially opposed to Ineo's offer. Transitional payments of up to £15,000 were said to have been offered to staff who accepted.
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.”
The company added: “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.”
The firm said a decision on whether to restart production at the oil refinery will depend on the removal of the threat of further industrial action. The company said the plant, which has been shut down since last week because of the dispute, is losing £10 million a month. Ineos had said it was ready to invest £300 million in Grangemouth, but only if workers agree to the new terms and conditions. Consumer groups said the closure of the refinery could increase petrol prices.