UK

Deal reached to keep Scottish plant open

Union agrees to pay freeze, changes to pension scheme and changes to terms and conditions

An employee at the Grangemouth petrochemical plant reacts to the news that it is to stay open Workers were informed by senior management at a mass meeting that the decision to shut the plant had been reversed. Photograph: Jeff J Mitchell/Getty Images
An employee at the Grangemouth petrochemical plant reacts to the news that it is to stay open Workers were informed by senior management at a mass meeting that the decision to shut the plant had been reversed. Photograph: Jeff J Mitchell/Getty Images
Fri Oct 25 2013 - 12:08

The owners of the giant Scottish Grangemouth petrochemical site have decided to keep it open, saving thousands of jobs from being lost.

The move followed acceptance by the Unite union of a survival plan, including a pay freeze, ending of the final salary pension scheme and other changes to terms and conditions.

Ineos had said it would close the site, which employs 800 employees, after workers refused to sign up to the changes.

Unite Scottish secretary Pat Rafferty, First Minister Alex Salmond and Unite general secretary Len McCuskey photographed during talks at the Scottish Parliament, Edinburgh on the situation at the Ineos Grangemouth site. Photograph: David Cheskin/PA Wire
Unite Scottish secretary Pat Rafferty, First Minister Alex Salmond and Unite general secretary Len McCuskey photographed during talks at the Scottish Parliament, Edinburgh on the situation at the Ineos Grangemouth site. Photograph: David Cheskin/PA Wire

But it said it would immediately reopen the site and the adjoining oil refinery, which have been shut down for the past week as a result of the dispute.

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A number of contractors have been laid off or switched to other sites.

Workers heard the news at a meeting with managers this morning.

Politicians from the UK and Scottish governments have been pressing the two sides to break the deadlocked row, warning of the grim impact on the economy if the plant had closed.

Unite’s general secretary Len McCluskey met shop stewards and managers at Grangemouth yesterday after announcing that the union had decided to “embrace” the survival plan.

Ineos has said the site is losing Stg £10 million (€11.73 million) a month.

Calum MacLean, Grangemouth chairman said: “Unite risked 800 jobs and one of the UK’s largest manufacturing facilities over a union official investigation before any verdict had been announced.

“It then advised employees to reject the change essential to the survival of Grangemouth. Today’s U-turn means Grangemouth now has an excellent future.”

Ineos said in a statement: “Unite’s withdrawal of its opposition to the company’s survival plan , which was already supported by 50 per cent of employees on the site, has allowed the shareholders to invest a further £300 million (€352 million) in the company.

“This money will be used to fund ongoing losses and to finance the building of a gas terminal to bring in shale gas ethane from the USA.

“The Scottish government has indicated it will support the company’s application for a £9 million (€10.56 million) grant to help finance the terminal and the UK Government has given its prequalification approval for a £125 million (€146.7 million) loan guarantee facility.”

Jim Ratcliffe, the chairman of Ineos Group, said: “This is a victory for common sense. Unite advised employees to reject change and vote for closure. Thank goodness people finally came to their senses. Grangemouth now has a great future.”

Ineos said Unite had made a “dramatic U-turn” and had agreed to a three-year pay freeze, no strikes for three years, moving to a “modern” pension scheme and changes to union agreements on the site including no full-time union convenors.

PA