Ineos have closed Granegemouth refinery permanently!

[Shaggy]

I just read in the news that Ineos have decided to close the petrochemical plant at Grangemouth and retain just the refinery. Bad news all round with 800+ jobs to go. It's a damning blow for Scotland but here's a wee eye-opener!

Alex Salmond has been pretty vocal about this and has tried to sort out some kind of resolution but to no avail....whether or not it was a genuine effort makes no difference because just what exactly have the clowns in Downing st. done in this sorry situation??

Better off together then are we??

So for all the anti-independence brigade, open your eyes and see what Downing street really think of Scotland because its clear enough to me today!!

[tonkatojo]

Occasionally you reap what you sow, shipyards, mines, water (in England), gas, electricity, railways, and now the Royal mail, all down the pan for ordinary folk. The refinery is not making the "gross" profits for the shareholders as other PLC's so greed says close it and sell it on.

[theone]

This has very little to do with the government, Scottish or British.

The chemical plant was operating at a £10 Million a month loss.

Ineos offered a deal to reduce costs but the union members rejected it outright.

[RagnarRocks]

Ineos is not a publicly traded company so doesn't report to the stock market it does pretty much what it wants what makes this worse is that whilst the unions have said they had nearly 50% of the votes I always thought democracy meant fairness so what about the slightly over 50% who didn't want strike action. This wasn't anything to do with govts this was Unions V Business and in this case a business took its business elsewhere

[weezer 316]

Lol! its all to do with downing street. Its got almost nothing to do with holyrood either, bar the fact its in scotland.

I know a lad that worked there, in the chemicals refinery until last xmas. Last week he was saying there was a bit of disgruntlement about the union, as they are losing millions. Apparently there had been an offer of £100m or so in new investment if they could agree new working terms, but clearly the union, or rather its members, rejected that. On their head be it. Cant see how you can complain when your losing millions and get an offer like that.

[ducati]

I fear the refinery will go too. The way the business works is highly co-operative in terms of shared resources and costs.

Essentially, the crude oil and base chemicals come in via the jetty, and the pipeline obviously, then is transported around both sites through the various processes.

It will have a massive effect on the Forth, Grangemouth and Falkirk.

[weezer 316]

Indeed. I dont know what the pay and that are like there, but from what he was saying all this was negotiated back when the forties pipeline was chocablock and they were making a fortune.

[theone]

I fear the refinery will go too. The way the business works is highly co-operative in terms of shared resources and costs.

Essentially, the crude oil and base chemicals come in via the jetty, then is transported around both sites through the various processes.

It will have a massive effect on the Forth, Grangemouth and Falkirk.

You're entirely right.

At the moment Grangemouth has its own power station. With no chemical plant to feed it may become uneconomical and so shutdown with grid supplies used instead.

But the power station waste heat is used to produce steam that is needed in the refinery. If the refinery has to build and run a new steam generation plant, it too may be seen as uneconomical.

Any part of a complex like this shutting down is not good news for the rest.

[theone]

Indeed. I dont know what the pay and that are like there, but from what he was saying all this was negotiated back when the forties pipeline was chocablock and they were making a fortune.

The wages for technicians at Ineos are very close to those of an offshore worker. But I don't think wages were the biggest problem, it was a crippling final salary pension scheme.

Apparently 65% of "wage" costs were going to retired personnel.

[squidge]

I copied this from a press release by unite. I have not the faintest idea what is going on at Grangemouth but something is fishy

"An analysis of Ineos accounts by tax experts show that Ineos ‘Chemicals’ expect to make profits of half a billion pounds in the coming years, blowing a massive hole in Ineos' claims that its petro-chemical operations are in serious financial difficulties at its site in Grangemouth Scotland.

The accounts also show that despite company claims of high employment costs; labour costs including pensions account for just under 17 per cent of total turnover. The company also claims the pension fund is in serious difficulties but fails to mention in press statements that the pension fund actually made a gain of £7.2 million in 2012.

On 4 October, Ineos announced that it had written down the value of its Grangemouth petrochemical assets to “nil value”. This valuation has been made public in Ineos' statutory accounts for the 2012 financial year, which have now been filed at Companies House. But Unite, Britain's biggest union has asked the tax expert Richard Murphy from Fulcrum Chartered Accountants to analyse the 2012 accounts and filings of Ineos Chemicals Grangemouth Limited.

The accounts simultaneously paint both a gloomy and upbeat assessment of the company's finances and future profitability. According to Mr Murphy the accounts appear to be contradictory raising questions as to whether Ineos' auditors PricewaterHouseCoopers were right to sign-off the accounts. The company claims it is suffering difficult trading conditions and poor cash flows and has written-off the value of £389 million of plant equipment, some of which was invested in as recently as 2012. Ineos says the future profitability of the site cannot be assured and use the same doubt to write off a further £464 million of intra-group loans.

However, at the same time the accounts show sales in the last year increased by 50 per cent, gross profits grew by a margin of 20 per cent and operating profit grew by 56 per cent.At the heart of the accounting contradiction lies the fact that the accounts paint such a pessimistic view of future profitability, they also claim that the company will be sufficiently profitable in future to realise deferred tax assets of £117 million. This requires more than £500 million worth of profits to be earned. "

Curious indeed

[theone]

Interesting reading squidge.

It sounds to me as if Ineos are quoting costs and figures for the Grangemouth site alone, whereas the Union are quoting figures from the whole Ineos chemicals group.

The pension fund "growing" statement is a bit misleading too, as it only grows with more money put in by the company!


As much as I love a good mystery/conspiracy I don't believe fo a second Ineos would be shutting down a profitable asset and calling in liquidators for fun..............

[weezer 316]

Expected to make a profit of half a billion pound......expected. And thats the group, not Grangemouth alone. I dont think there is any doubt at all its losing money at Grangemouth, money hungry vulture capitalists dont close money generating assets for the crack. You do realise they likely wont find a buyer for this unless the scottish govt puts its hand in its pocket. Several refineries have closed in the past few years with no buyers in site.

Its telling that the union told its members to reject its offer. Frozen wages, end to final salary and £300m of investment aint half bad given the alternative.

[RagnarRocks]

Regardless of how curious Ineos accounts are at the end of the day it's blow for the people who worked there and they won't be getting there jobs back seems to me the Unions wanted a fight well they got one and lost so another massive industry shut down because of belligerent unions. I fail to see how the government is to blame for a private company making a commercial decision but I can understand a company not wanting a final salary pension scheme which nowadays only exist in public sector. Was not the initial dispute to do with the skulduggery over vote rigging and dubious political manoeuvring by a union rep linked with the Falkirk debacle. If so more shame on the union, unions are supposed to secure jobs and improve working conditions, from what I've seen in my life all they seem to do is destroy industries loose thousands of jobs then the leaders pay themselves huge salaries and pensions

[weezer 316]

You cant generalise like that Ragnar, just the same way to cant generalise rich men and banks and greedy vultures out to restart workhouses. Many unions do want political power without the responsibility that comes with it, but at the same time their existence is vital to ensure single workers arent exploited.

The unions need to peg their members interests to the businesses needs and outlooks and vice versa. Germans unions do it well, as do norwegian unions, and they have some fo the largest, most profitable conglomerates going, no reason we cant do that here. Instead we often have unions who dont care if a company is on its knees, they still demand more and more, and boards who are hellbent on getting more and more for less and less.

[RagnarRocks]

You cant generalise like that Ragnar, just the same way to cant generalise rich men and banks and greedy vultures out to restart workhouses. Many unions do want political power without the responsibility that comes with it, but at the same time their existence is vital to ensure single workers arent exploited.The unions need to peg their members interests to the businesses needs and outlooks and vice versa. Germans unions do it well, as do norwegian unions, and they have some fo the largest, most profitable conglomerates going, no reason we cant do that here. Instead we often have unions who dont care if a company is on its knees, they still demand more and more, and boards who are hellbent on getting more and more for less and less. I'd accept that as a fair point lets just hope they sort it all out before they shut the other half my thoughts are with the families tonight. Personally I'd rather have my wages frozen for two years and a change on my pension than have no job but each to their own.

[outsidethebox]

I feel awfully sorry for the families of the workers out of a job as a result of this closure. But from what I've read the issue seems to have boiled down to this. Accept a pay freeze for 3 years, and a drastic change to pension arrangements, or we will close the plant. Ineos are not really known for being a push over, they have form for getting the workforce to the position they want. Given the current economic climate, and the attitude of this government to employees as opposed to "businesses" I think what we have here once again is a case of "Lions led by donkeys". The unite union has played politics with the workers jobs, and lost in a huge way. I know they did not want to accept the new contract, but had they done so these people would still have jobs. There would still have been an opportunity to prove the worth of the plant, and over the course of time negotiate new deals. It's not as though we are talking about workers on minimum wage being forced to take a wage cut.

I really can only equate the failure of the vast majority of the workforce at Ineos to accept, however relectantly, the new deal with Turkeys voting for Christmas.

I hope it is not too late, and common sense can prevail.

[weezer 316]

I have a funny feeling the scottish government may nationlise this. It would make zero sense from a public budget point of view, would drain money away, and probably just kick a can down the road. From an indy referendum point of view it makes perfect sense.

Are they not in the middle of nationalizing prestwick airport also?