It looks very strange from the outside looking in.<\/p>\n
INEOS, the 3rd largest independent global chemical company is seeking to recruit highly motivated technicians<\/em>, the advert read, posted only 3 weeks ago on 30 September.<\/p>\n These posts are based at our sites at Grangemouth, INEOS\u2019 largest asset which includes Scotland\u2019s only crude oil refinery and Finnart on Loch Long. This is an exciting time to join us: we are fully committed to our business in Scotland and are looking to develop our technology business globally.<\/em><\/p>\n \u2026Successful candidates will receive an extremely competitive salary including shift allowance and benefits package including a competitive pension scheme.<\/em><\/p>\n Cut to yesterday when the chairman of INEOS Grangemouth announced that the workers had to accept the company\u2019s survival plan or the plant would close, as they were losing \u00a3150 million a year and had a pensions deficit of \u00a3200 million. Today Unite 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 replacement of the final salary pension scheme with a money purchase scheme. INEOS responded by confirming the closure of the petrochemical operation at Grangemouth.<\/p>\n It was in 2008 that INEOS originally took the decision to close the company’s final salary pension scheme to new employees due to the costs associated with its continued operation. Following a strike organised by Unite, the company relented following various interventions including by the then President of the Faculty of Actuaries, Stewart Ritchie<\/a>, keeping the scheme open to new employees in exchange for a 2% employee contribution. Unite made, and then withdrew, a claim that INEOS had asset-stripped the Grangemouth refinery business which had been spun off from BP in 2006. It also claimed that workers at Grangemouth were paid \u00a36,000 less than workers at other similar facilities. One estimate was that the average salary at Grangemouth was \u00a340,000 per year at the time.<\/p>\n Assuming the average has increased to, say, \u00a350,000, that would represent a total wage bill now of around \u00a370 million a year, based on a total workforce of around 1,400. The proposals on increases and bonuses would therefore look inadequate to make much impact on losses of \u00a3150 million a year. The pension changes may be more significant (the company estimates pension costs are currently 65% of salaries, although a large part of this is likely to be payments on the deficit which would be likely to remain after any restructure).<\/p>\n However, things are not what they seem. The \u00a3150 million pa quoted by the company is negative cashflows rather than losses. The company\u2019s is investing \u00a3150 million more than the profits it makes each year at Grangemouth. The refinery is expected to make a profit<\/a> in 2013.<\/p>\n Atleast it was. INEOS had warned that unless the survival plan were accepted, it would close half of the plant in four years’ time. The action to permanently close the petrochemical plant<\/a> and not to reopen the refinery while they felt there was still a \u201cthreat of strike action\u201d therefore represents a pre-emptive strike by the company, after Unite had agreed to call off strike action<\/a> last week. The three day stoppage in 2008 was said to have cost the UK economy at least \u00a3100 million.<\/p>\n And the strangeness does not stop there. There is another dispute going on alongside the economic one. Unite originally threatened industrial action in July over the suspension of Stevie Deans, a Unite official allegedly involved in the selection of a Labour parliamentary candidate in Falkirk, who was subsequently reinstated and cleared by the Labour Party\u2019s internal investigation. Dean is currently being investigated by an undisclosed third party on behalf of INEOS for allegedly using his position to recruit staff to the constituency party, with the investigation due to conclude on Friday<\/a>. It is not clear where the announcements today leave this investigation.<\/p>\n If the petrochemical plant is to go into insolvency, possibly followed by the closure of the rest of the site, the next question for the workers after the loss of their salaries will be what is to happen to their pensions if INEOS sell up. To paraphrase Lynyrd Skynyrd, there are definitely things going on that we don’t know here.<\/p>\n","protected":false},"excerpt":{"rendered":" It looks very strange from the outside looking in. INEOS, the 3rd largest independent global chemical company is seeking to recruit highly motivated technicians, the advert read, posted only 3 weeks ago on 30 September. These posts are based at our sites at Grangemouth, INEOS\u2019 largest asset which includes Scotland\u2019s only crude oil refinery and […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,8,11],"tags":[],"class_list":["post-302","post","type-post","status-publish","format-standard","hentry","category-actuarial","category-economics","category-pensions"],"_links":{"self":[{"href":"https:\/\/weknow0.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/302","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/weknow0.co.uk\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/weknow0.co.uk\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/weknow0.co.uk\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/weknow0.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=302"}],"version-history":[{"count":0,"href":"https:\/\/weknow0.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/302\/revisions"}],"wp:attachment":[{"href":"https:\/\/weknow0.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=302"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/weknow0.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=302"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/weknow0.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=302"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}