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INEOS: Grangemouth threatened with closure

23rd October 2013

INEOS: Grangemouth threatened with closure

By Mick Brooks

Last week boss Jim Ratcliffe ordered Grangemouth oil refinery to be closed. He did so despite Unite calling off their threat of strike action due to take place on Sunday 20th October. This is a lockout of nearly 1,400 workers which could soon bring large parts of Britain to a standstill, with millions of jobs potentially under threat. Grangemouth supplies Scotland and Northern England with petrol and diesel, is in a supply chain with a myriad of subcontractors and is a key link in bringing North Sea oil onshore through the Forties pipeline. Ratcliffe seems determined to take on the union. On October 23rd he made a shock decision announcing the permanent closure of the plant.

His ‘rescue’ plan for the plant involved a freeze on pay, cuts in shift allowances and the tearing up of the company’s final salary pension scheme. Ratcliffe said he would invest £300m if he got his way; otherwise the plant would close. This is blackmail. He suggests the financial position is desperate and the plant is losing £10 million a month; yet he could afford to bribe workers who broke ranks with Unite with bungs of up to £15,000 each. Unite reports that INEOS’s “finances are a mystery”.

Is Grangemouth losing money? INEOS management claims it is losing £10 million a month. But its finances are a murky affair. Ratcliffe took the plant over from BP in 2006. The wild swings in petrol prices and the onset of recession in 2008 made the acquisition of the plant a desperate gamble. Ratcliffe is said to be a dollar billionaire according to Forbes, but he didn’t buy Grangemouth with his own money. He issued a pile of junk bonds and loaded the firm with debt. One fact that does seem to stand out is that the company is $7.8 billion in debt. This is the classic style of the new generation of asset strippers, called private equity companies. Once they have sucked the company dry, they walk away and move on to the next victim. Ratcliffe will have done just that – if he is allowed to get away with it.

INEOS, which owns the Grangemouth plant, is the biggest private company in the UK. Because it’s been taken private the firm doesn’t have to publish full accounts. In addition Ratcliffe moved the headquarters to Switzerland, and INEOS hasn’t paid a penny tax in this country since. He is not just blackmailing Grangemouth workers; he is threatening the livelihood of millions of people in Britain. Unite put the case for an independent audit of the company’s books, but Ratcliffe refused. The case that INEOS management should come clean and open the accounts to labour movement scrutiny is unanswerable.

Latest reports from Unite are that only a minority of the workers (about 300) have taken the bribe; most are standing firm behind the union. Unite has not sought this confrontation. They have been conciliatory in the face of management threats. They pledged not to strike during this critical period of negotiation. Management walked out after 16 hours of talks at ACAS. Is Ratcliffe playing bluff and double bluff with the workers?  If so he is playing for high stakes, and he is playing with other people’s livelihoods.

Ratcliffe has been looking for a fight for months. First he picked up on the issue of Stevie Dean, the shop steward who was involved in the Falkirk Parliamentary selection. Despite all the dirt stirred up, the police and the Labour Party hierarchy have given the Falkirk process a clean bill of health. What on earth gives INEOS management the right to raise the issue?

Now that is seen as a diversion. Ratcliffe was on the warpath against the wages and conditions of the workforce as a way of digging himself out of a hole of his own making. That was obviously his real target from the outset. It is our duty to support the Grangemouth shop stewards and workers from this onslaught in every way we can.
Ratcliffe has shown himself unfit to run a strategically vital company. He is only interested in his own profits. The SNP-led Scottish government is looking around for a buyer. Why should any other private capitalist behave any differently? The firm should be taken into public ownership to ensure the jobs of the workforce and the welfare of the wider community that the plant serves.

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