Grangemouth workers hung out to dry by Unite and SNP

The fate of jobs at the Grangemouth petrochemical plant now lies solely in the hands of a ruthless corporation that buys firms and then drives them back into profit at the expense of their workers’ wages and benefits.

The 1,800 Grangemouth workers have found that neither the Unite union leaders, who they pay for, nor Labour or SNP representatives they voted for, would stand with them, if they decided to mobilise a real fight against Ineos. In an amazing display of solidarity and determination, the majority of the Unite members had  voted to strike and reject the company’s blackmail.

But within hours of their vote on Wednesday, the message from all sides was that there was no alternative to accepting destruction of living standards and the pensions of any future workers. A media outcry held the workers responsible for the fate of the 10,000 related jobs in the local area.

So yesterday, their union leaders simply caved in. Unite general secretary Len McCluskey left earlier negotiations up to local officials but hurried up from London to capitulate in person. Within hours he had unreservedly accepted the company’s terms, “warts and all”. Shocking but true.

McCluskey has breathed fire and brimstone since the ConDems coalition took power, threatening strikes, civil disobedience, even a general strike against austerity, the public sector wage freeze and pension curbs. When it came to the crunch, he had no fight. Hot air and nothing more.

Later today it will be discovered whether this treachery is enough to keep the plant open or if in reality the company never had any intention of staying their hand. The closure of the petrochemical plant at Grangemouth would reduce global capacity and drive up prices to the benefit of Ineos plants elsewhere.

And that's the big lesson. When it comes down to it, the corporations make decisions on the basis of their own business plans, on the grounds of costs, shareholder value and profits. And so who holds the power?

The Scottish SNP government lined up with the Westminster government to demand that the Grangemouth workers accept the inevitable. First minister Alex Salmond was in talks begging Ineos not to close the plant. Finance minister John Swinney, the great champion of an oil-based independent economy, stood shoulder to shoulder with ConDem Scottish secretary Alistair Carmichael.

SNP claims that a capitalist Scotland would be in some way better for Scottish workers have been exploded. Ineos, like all Scotland's key industries from oil to whisky, is not "Scottish". They are run by freebooting global capitalist transnationals with no care for local conditions, except where they impact on profits.

The adjacent oil refinery, whose waste product is processed at the threatened plant, is owned by Petroineos, a refining and trading joint venture between Ineos and the Chinese government-owned PetroChina. Its other refinery is at Lavera, near Marseilles.

As the recession continues and fracking throws more cheap US coal and gas on to the world market, who knows what will happen to the offshore oil refining business. There is no such thing as security for workers, whatever the status of their country's governance.

The Unite members were ready to fight and their union could have organised an occupation to prevent the dismemberment of the plant, but they did not and will not. Independence will not change that.

Those who limit their vision for the future to achieving a "Yes" vote in the 2014 referendum have missed the point. Independence and self-determination should not be reduced to whether a Scottish elite should be in charge of a capitalist Scotland.

It has to be about acquiring a revolutionary independence, forging a new solidarity across the UK and Ireland, based on the struggle for a democratic state, for the socialisation of Scotland’s resources, for a new commons. That would provide a platform for a sustainable energy strategy that protects both jobs and the environment.

Penny Cole

Debt crisis behind Grangemouth strike

Members of the Unite trade union at Grangemouth are set for the first strike at an oil refinery for 73 years over pension rights. The dispute brings the potential impact of declining production of oil into sharp focus. The threat of a major impact on availability of fuel in Scotland and the North of England has driven already record prices higher and triggered panic buying as supplies from the North Sea oil and gas field are cut off.

What lies behind the dispute? The Grangemouth refinery became part of the Ineos Group, when it bought Innovene from BP for $9 billion in 2005. This was part of the debt-funded buying spree that in ten years created what is now the world’s third largest chemicals producer from a standing start in 1997/8.

Jim Ratcliffe, Ineos chairman and CEO, and listed by the Sunday Times as the UK’s 10th richest man in 2007, borrowed $12 billion for the Innovene deal from Barclays Capital, Merrill Lynch and Morgan Stanley. The extra cash of about $3 billion was used by Ratcliffe, known as “the alchemist”, to refinance Ineos’ existing debt. And it helped to treble Ratcliffe’s estimated personal fortune to £3.3 billion.

As Oligopoly Watch put it at the time “One warning sign: companies are now paying increasingly higher prices for assets. Part of that can be attributed to the competition with cash-rich equity firms. The world has a record amount of cash looking for a profitable home.” Three years later and things have changed. The tumbling cards of the house of fantasy finance are claiming victims.

Ineos is in trouble. Its sales and profits have been falling. In the third quarter 2007, its before-tax profits went negative – it started to make a loss. The impact of the falling value of the dollar only served to make things worse. In third quarter 2006 it made a profit of 96.9m euros on sales of 7395.7m euros. A year later, debt financing costs helped turn a gross profit of 485.9m euros on sales of 6934.1m euro into a before-tax loss of 0.9 m euros. But a tax rebate turned the loss into a profit of 1.2 m euros.

At the end of last year Ineos employed more than 15,000 people in 17 countries in 68 plants producing 50m tons of chemicals a year. Clearly Ratcliffe intends that they, not he, are going to pay to restore profitability. As his Grangemouth chief Tom Crotty put it: “The vote for strike action is hugely disappointing. We need to spend £750m modernising Grangemouth and a strike will make it virtually impossible for us to achieve this. We believe the proposed strike action could cost at least 650 direct jobs and indirectly many more. The union needs to understand that we live in the real world. If we are not competitive and we can’t get the investment, we will lose the jobs.”

Closure of the final salary pension scheme to new entrants and reduction of the value of pensions for existing workers at Grangemouth that sparked the dispute will prove to be part of a global assault by Ineos on wages, pensions and working conditions. As the global financial and economic crisis deepens, firms in every corner of the globe will passing the burden on to their workforce if they can.

Grangemouth workers should seek support from unions across the globe in their struggle to defend conditions. They should build a campaign to transfer petrochemical production into social ownership under the control of the workforce. This will not only create the conditions for defending pensions, jobs and other rights but a necessary step in dealing with the depletion of resources and global warming that both arise from the chase for profit.

Gerry Gold
Economics editor