Grangemouth: Plant secure for next 25 years

The Ineos petrochemical plant in Grangemouth. Picture: PA

More than 800 jobs at the site’s petrochemical plant were saved on Friday after the Unite union accepted a rescue package from the company Ineos.

Workers and politicians were united in welcoming the deal, which capped a dramatic week for the plant. And industrialist Jim Ratcliffe, who arrived at the site on Friday night to address staff, said in an exclusive interview that it will become “very competitive again” after a new gas terminal is built and shale gas brought in from the United States.

He said the deal “assures us of a very good future for Grangemouth and the refinery for the next 20 to 25 years.”

His comments on Friday night capped a remarkable turnaround. Ineos announced on Wednesday that it was closing the petrochemical site after proposed changes to pay and conditions were rejected by the workforce. That decision also left a question mark over the long-term viability of the neighbouring oil refinery.

But the union then said it would accept the company’s survival plan, kickstarting talks that led to Friday’s turnaround.

The deal includes a three-year pay freeze, ending of the final-salary pension scheme and other changes to terms and conditions.

Ineos said on Friday that it would immediately reopen the plant and the adjoining oil refinery and invest £300 million in the site.

Grangemouth chairman Calum MacLean said: “We are very happy to announce that following a meeting with shareholders yesterday, Grangemouth petrochemicals will remain open.

“Ineos have confirmed that the £300m they are going to put into it will be available and we will start immediately with those projects again.”

But he did not rule out the chance of job losses, saying “very limited” redundancies were a possibility.

The deal is contingent on £125m of loan guarantees from the UK government and £9m of regional development assistance from the Scottish Government.

First Minister Alex Salmond welcomed the rescue, insisting it will secure the future of the petrochemicals industry in Scotland.

“I am delighted that people have rallied round to protect these jobs, and now we can all agree that Grangemouth has an outstanding future,” he said.

“Clearly for many people across the communities of the Forth Valley, Wednesday was a day of despair. Today is quite different, and is a day of great satisfaction that not only has a key part of Scotland’s industrial infrastructure been saved, but that people can look forward with confidence to a bright future.”

He said there will be “continued debate and recrimination in some quarters about why the future of this facility went so close to the cliff edge.”

Ineos had insisted the plant loses £10m a month and that the rescue deal was needed to allow it to spend £300m upgrading facilities. The money will be used to fund losses and for the building of a gas terminal to bring in shale gas ethane from the US, the company said.

Workers expressed their delight after news of the U-turn was announced. Eddie Hainey described the news as “fantastic”.

He said: “It’s a chance for a new beginning. If management and the union can develop trust, this plant’s got a real future.

“It’s a real relief … it’s been very, very difficult for us all, very difficult to focus on what you’re doing with this in the background.”

The announcement followed talks staged at the plant between Ineos and Alistair Carmichael, the UK government’s Scottish Secretary, and John Swinney, the Scottish Government’s finance secretary.

Prime Minister David Cameron told a press conference in Brussels: “On a day when the economy is picking up, it’s excellent news that a really important petrochemical plant will stay open, saving thousands of jobs not just at that plant but in the supply chain, and also seeing the refinery reopen. It’s good news. I think sense has been seen.”

Mr Carmichael said: “The staff and their families have been through a very stressful and uncertain time. They have been through a hell of a week and I hope they have a much better weekend as a result of today’s announcement.

“They can look to the future with an optimism which was absent earlier in the week.

“This is the outcome we have worked towards and one which Scotland and Grangemouth deserve.

“There are undoubtedly lessons to be learned from this dispute, but for now we should focus on the immediate success of securing the site’s future.”

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

The union has been criticised by some for its approach to the talks. But its Scottish secretary, Pat Rafferty, said: “Grangemouth is the powerhouse of the Scottish economy – it now has a fighting chance of upholding this crucial role into the future.

“Obviously today’s news is tinged with sadness – decent men and women are being asked to make sacrifices to hold on to their jobs, but the clear wish of our members is that we work with the company to implement its proposals.”

The Grangemouth refinery supplies most of the fuel for petrol stations in Scotland, Northern Ireland and the north of England. AA president Edmund King described the rescue as great news for employment, the economy and the longer-term resilience of fuel production in the UK.

The Moderator of the General Assembly of the Church of Scotland, the Rt Rev Lorna Hood, said everyone in the Grangemouth area will be relieved.

“Finding a just resolution in a conflict is never easy and always involves compromise, so we are grateful that an agreement has finally been reached,” she said.

• Grangemouth analysis: Sigh of relief at resolution

• Grangemouth analysis: Embarrassment saved by reopening

• Grangemouth analysis: Steps that must be taken

• Grangemouth: Trade union leaders speak of relief

Grangemouth: Plant secure for next 25 years - owner