Q&A: how did union standoff come to this?

Published on Saturday 26 April 2008 19:48

Q: What is the dispute about?

A: The Unite union has called the strike in protest at plans by Grangemouth owners Ineos to close its final salary pension scheme to new workers and to make other changes to pensions.

Q: Is there a personality clash?

A: Tony Woodley, Unite joint leader, and Jim Ratcliffe, major owner of the Ineos group, are poles apart.

Woodley has risen through the ranks and has developed a reputation of being one of the most respected trade unionists in the UK and Ireland, fighting against Ford and British Airways. Ratcliffe is the 10th richest man in Britain. Before founding the company a decade ago, Ratcliffe worked for oil giant Esso and the private equity group Advent. Ineos is the world's third-largest chemical company.

Q: What is the union argument?

A: Unite maintained there were no grounds for closing the scheme, which it said was in surplus and only needed 16m a year funding by the company. Unite also claimed that Grangemouth made up to 3m a day in profits. The changes being proposed by Ineos would reduce workers' payouts by an average of 10,000 a year, said Unite.

Q: How does the company respond to these claims?

A: Ineos said it would still provide generous pensions for its employees, stating that a quarter of the entire salary bill at Grangemouth went into the pension fund. The final salary arrangement will remain for existing workers but the main difference will be that staff will have to make a contribution for the first time, bringing them into line with the majority of workers elsewhere in the UK.

Q: What exactly does the Grangemouth oil refinery do?

A: The refinery, which sits on the Firth of Forth, is the only one north of the border and is Scotland's main fuel supplier. The plant is directly connected to the Forties oil pipeline in the North Sea and has an annual capacity of about 10 million tonnes of crude oil. The oil is processed into petrol, diesel, plastic and other materials at various temperatures across a number of different plants in the Grangemouth facility.

Q: What are the consequences of the strike for Grangemouth?

A: Ineos said investment of 750m will be put at risk if the dispute is not resolved. Failure to modernise the plant and reform pension arrangements will lead to a review of Grangemouth's future, bosses have said.

Q: How big is Grangemouth?

A: The site is spread over 1,700 acres of land – the size of 640 football pitches – and houses a number of separate businesses run by Ineos, which acquired Grangemouth from BP in 2005.

Q: What are the prospects of more talks?

A: Two days of talks at the London headquarters of the conciliation service Acas collapsed earlier this week and there are no plans for an early resumption of negotiations.