Grangemouth dispute: Hopes rise after Unite accepts survival plan

Len McCluskey, general secretary of Unite, says he is "optimistic" of a positive response from Ineos

Political leaders have expressed optimism for the future of the closure-threatened Grangemouth petrochemical plant after unions accepted a survival plan put forward by management.

Scottish Finance Secretary John Swinney and Scottish Secretary Alistair Carmichael spoke to plant owners Ineos on Thursday afternoon.

Unite had earlier agreed to "embrace" the firm's proposals "warts and all".

All 800 employees were told they would lose their jobs on Wednesday.

Workers had previously rejected proposals by the firm to end their final salary pension scheme and cut shift allowances.

Meanwhile, Ineos said the number of contractors who have been laid off at the Grangemouth complex, since the dispute started last week, had reached 2,000.

Workers from Doosan Babcock leaving the plant said that more than 100 of them had just been told that there was no more work.

Other companies are understood to have given a similar message to staff in the past 24 hours.

Several of those affected blamed Ineos staff for holding out against changes to pay and pensions.

Earlier, UK and Scottish governments representatives had expressed optimism over the future of the petrochemical and refinery at Grangemouth.

After meeting with Ineos, Mr Carmichael said: "We are in a much better place today in relation to the future of the plant than we were yesterday.

Analysis

There are few subjects on which David Cameron and Alex Salmond's governments have agreed since both men signed a deal paving the way for a referendum on Scottish independence.

The fate of Scotland's largest manufacturing site has, however, forced political foes to unite.

Departments in Whitehall and Edinburgh are frantically engaged in a last-ditch effort to save the jobs of 800 workers and a site which they agree is, simply, too big to fail.

While voters are weighing up the pros and cons of the nation's future, the implications of closure of Grangemouth are unthinkable, economically and politically, for both governments.

UK ministers don't want to see hundreds of manufacturing jobs axed just as the sector is showing signs of recovery and as unemployment falls. Add to that the threat to the neighbouring oil refinery and the implications its closure would have on the energy sector.

Aside from the massive blow to Scotland's industrial heartland, a significant part of the Scottish government's financial case for independence is based on oil and Grangemouth is Scotland's only crude oil refinery. To lose it would be a catastrophe.

So, for the moment both governments have set aside their differences. Normal service, over the future of the United Kingdom, will be resumed in public soon.

"There remains, of course, a great deal to be done."

Finance Secretary John Swinney commented: "Behind us is a plant of over 1,000 high quality jobs in refining and petrochemicals, these are very skilled high quality jobs and the Scottish economy and UK economy requires that economic impact.

"This plant has got a great future, everybody accepts that Grangemouth has got a great future.

"What we need to do is resolve these outstanding issues, get the investment plan implemented and take forward and improve the prospects for the people that work in this plant."

Ineos has said it plans to make an official statement on the Grangemouth issue on Friday.

The BBC understands that some kind of agreement is being drawn up for workers to sign, which would need approval from major Ineos shareholder Jim Ratcliffe.

Local MP Michael Connarty said he believed the union would be making no challenges to the survival plan and would be accepting it in full.

He added: "As far as I understand the company are away to draft it into a legal document which the convenor will sign on behalf of the shop stewards committee, and that will then be binding on the workforce in the plant."

Unite earlier said it had made a number of recommendations to Ineos at its meeting on Thursday morning.

General secretary Len McCluskey said: "This plant is on cold shut down and each day that goes by makes it harder to start back up again, which is why the stewards made the offer to the company - so that we can get people back to work."

He said the union would not let the plant close, adding Unite had been "encouraged" by similar comments from First Minister Alex Salmond.

Mr McCluskey has told Ineos he wants to meet Mr Ratcliffe for face-to-face discussions, arguing it would be an opportunity for him to "clarify" Unite's position and for Mr Ratcliffe to raise the assurances he was seeking.

Mr McCluskey added: "I feel very positive about our objective of making certain that the plant stays open. Obviously now it will be in the hands of Ineos.

"I'm optimistic that we will have a positive response from Ineos in the next 24 hours or so."

Satellite image of the Grangemouth site

Prime Minister David Cameron, speaking during a visit to Yorkshire, said he remained hopeful a resolution to the dispute could be reached.

He added: "This is an important business for Scotland, it's a very important industry for the whole of the United Kingdom.

"We want to see those jobs saved, we want to see this business thrive, and I'm hopeful that agreements will be reached."

Labour leader Ed Miliband said he had discussed the crisis with Unite and believed the union "fully understands the gravity of the situation".

"They want to represent their members, and rightly so, and they're concerned about their members' jobs and livelihoods," he added.

Background: Grangemouth dispute

  • The dispute first flared up in the summer over the company's treatment of Unite official Stephen Deans, who has worked at Grangemouth for more than 20 years
  • He was accused of trying to rig the selection of a Labour candidate for the Falkirk seat at Westminster but was later cleared
  • But Ineos has been carrying out its own investigation into claims Mr Deans improperly used the refinery for union business. Its findings are due to be published on Friday
  • Unite members at Grangemouth had been due to strike last Sunday over Mr Dean's treatment
  • Ineos had closed the plant ahead of the industrial action and said it would not be restarting the facility even after the strike was called off
  • It said Grangemouth was losing huge amounts of money and faced going bust unless staff agreed to a survival plan
  • The proposals included changes to pay and conditions. They were rejected by about half of the site's workers
  • The decision that the petrochemical plant should close was taken at a meeting of Ineos shareholders, including chairman and founder Jim Ratcliffe, on Tuesday

Before the talks with Unite, Ineos director Tom Crotty said the management team at Grangemouth would listen to what the union would be saying.

He told BBC Radio Scotland's Good Morning Scotland programme: "If they believe there is substantial differences in where we are now then clearly they have a duty to take that back to the shareholders."

Previously, Ineos said it was ready to invest £300m in Grangemouth if workers agreed to the new terms and conditions.

The company said it had decided to close the plant because half the workforce had refused to accept the cost-cutting plan essential for the facility's survival.

Mr Crotty said: "The shareholders, after the vote on Monday, and quite understandably, took a view that if the workforce had rejected that £300m investment then how were they going to go ahead and make it if the workforce were not behind that?"

David Watt, from the Institute of Directors, said it was "quite sad" that the dispute at Grangemouth had reached this point.

He commented: "It's rather gloomy in the way this has developed. I would have hoped both parties could have negotiated over a longer period.

"I think there are opportunities but it's quite sad that we've got to this point.

"There are probably faults by both sides."

And he said he was surprised that the union thought the closure announcement was a shock.

About 800 of the 1,370 people directly employed at the Grangemouth complex work at the petrochemical plant, with many more working there as contractors.

Local councillor Baillie Joan Paterson describes how the closure of the Grangemouth plant would see the town go from "boom town to doom town"

The dispute at the site, near Falkirk, began over the treatment of a Unite union official and escalated to the threat of strike action.

This was dropped but the operator shut down the plant and issued an offer of revised terms and conditions in a "survival plan", which was rejected by union members.

Ineos chairman and founder Jim Ratcliffe had said at the weekend that if the petrochemical plant closed it was likely the neighbouring refinery would go as well.

The refinery provides most of the fuel to Scotland, the north of England and Northern Ireland.

Ineos had said liquidators for the petrochemical plant would be appointed within a week.

Falkirk Council has announced plans to set up a task force to respond to the closure plans, describing the move as "devastating news" for Grangemouth and the local area.

1,700-acre site; 1,370 staff - 800 jobs affected; 2,000 contractors employed; 10,000 jobs rely indirectly on the site; estimated to be 8% of Scotland’s manufacturing industry; supplies 70% of the fuel used at Scotland's filling stations; petrochemicals plant manufactures 2m tonnes of chemical products every year; refinery processes 200,000 barrels of crude oil every day. Source: Ineos, Stirling University

A joint statement from all council members said: "The planned closure will have a massive impact on the future of our communities.

"Falkirk Council has a critical role in supporting our communities through this difficult time and we are committed to working together in the best interests of the area.

"As well as the 800 Ineos jobs in the petrochemical plant directly affected, the plant is a major contributor to the wider local and national economy.

"The future of the refinery in Grangemouth is also under threat. This is of grave concern and it is essential that all parties get round the table again as soon as possible."

The statement added that the council was liaising closely with the Scottish and UK governments and was also seeking further talks with Ineos and Unite "as a matter of urgency".

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