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The Ineos Connection
The Grangemouth oil refinery and connected petrochemical plant remains one of the biggest contributors to the Scottish economy. It is also strategically important for the North Sea oil industry. The Forties pipeline, which carries a third of the UK's daily oil output from 65 platforms, runs from the North Sea to BP’s Kinneil plant, near Grangemouth. And that plant is reliant on power and steam from the Ineos facility to function.
We say “remains” because for years the global refining industry has been in crisis. In the US and Europe refineries have been shutting down regularly. Oil consumption is falling and newer more sophisticated refineries are being built in the oil producing areas. This is how Ratcliffe’s Ineos company was able to acquire Grangemouth at a knockdown price from BP (after Labour had privatised it) in 2005 as they were trying to get out of the refining business. Ratcliffe said they would be cutting costs to make the refinery profitable again. However the scheme was hit by a double whammy when first the financial crash of 2007-8 led to Ineos being unable to raise more cash to carry out their restructuring programme, and in 2008 the workers struck against Ineos’ proposal to make employees pay 6% of their salary as contribution to the final salary pensions scheme.
The 2008 strike, the first in any UK refinery for 73 years was backed by 97% of the Unite members in a ballot. It lasted 3 days and caused 70 oil platforms to shut down as well as hundreds of millions of pounds in losses. In terms of costs/hour it is said to have been the costliest in UK history. The outcome was a draw with both sides agreeing to “continue negotiations”. Needing to find more capital, Ineos joined with the Chinese state oil company Petrochina in 2011 to formed Petrolneos (a 50/50 split) with Petrochina buying $1 billion of Ineos’ assets. Ineos also moved its headquarters and management to Switzerland for tax avoidance reasons (apparently saving £400 millions a year). In October 2013 Petrochina let it be known that it was unhappy with the return on its billion dollar investment and reportedly was planning no further investment.
And to round off the problems of the refinery, cheap stockfeed from America (shale oil) is hitting the profitability of European refineries and the overcapacity in Europe is still a problem.
Ineos claims the plant is losing £10 millions a month – yet profits were reported as £31 million in 2011, and £49 million in 2012. It seems they’ve used a sleight of hand in using investment costs (expected to supply profit by 2020) to mark down profits. According to one accountant quoted in the Daily Record if you used normal accountancy procedures Grangemouth was not only profitmaking last year it was in no need of the £134 million it screwed out of the Scottish and Westminster Governments.[1] It was another smart move by Sir Jim Ratcliffe to take advantage of the looming vote on independence next year. Neither Salmond nor Cameron wanted to give the other a propaganda victory by being blamed for not doing their bit to keep Grangemouth open so the latter coughed up £125 million and the former £9 million in sweeteners and tax breaks.
But this is also an indication of the nature of capitalism in our time. Sovereign states might throw their citizens into penury to bail out banks (otherwise the system would collapse) but when it comes to inducing manufacturing to stay on your territory all the power lies with global capital. And the same goes for the workforce too. Grangemouth has about 800 full time workers and another 1000 casuals on short-term contracts. They work 12 hours shifts and the work is skilled so they are the last workers to be getting something like the wages that were earned back in the 60s. There is plenty of evidence that the workforce were up for a fight. 50 % had refused to respond to management blackmail before the threatened shutdown. An overtime ban and work to rule was widely supported by the workforce. So why did the Unite union, which was supposed to represent the workers cave in so completely and so quickly and even give the management more than had been originally asked?
The Union-made Disaster
The answer is that they had abandoned that role. The full time convenor at Grangemouth is, or was, Stevie Deans who is also Chair of the Falkirk Labour Party. As anyone still vaguely interested in the political chicanery that is the meat and bread of our parliamentary system will know, the Unite union has been accused of manipulating the election of their own candidate for the Falkirk seat in an upcoming by-election. Unite in many ways are the dominant force in the Labour Party in Scotland (its leader Johann Lamont, is a Unite member). Deans appears to have been involved in pressuring people to withdraw allegations of wrongdoing in the Falkirk selection process. Ineos who, according to The Scotsman, paid Deans to work as a full time union convener, claimed he was spending 25% of his work time on Labour Party business, and also claim they have found 1,000 emails to back this up, including data protection infringement evidence. It would seem reasonable to assume they knew about this all along, and that it fitted their plans to use that information once they decided to go for a confrontation. So – rather than a union responsible to its members (as if such a beast existed anymore) – we have a squalid little nest of vipers fighting over their own interests whilst workers at the plant get hammered. And Unite called a strike over Deans’ alleged victimisation after consulting only one shop where 100 people worked. Most of the workforce thus found themselves facing a strike over Deans and the Labour Party of which they knew nothing.. It was perfect for the management. When the officials realised their blunder it was too late. Calling off the strike did not stop the closure of the plant and the workers were suddenly only left with the prospect of the dole queue.
Unite realised the incompetence of its own officials and sent in the big guns from London to salvage – not the best conditions for the workforce – but the best position for the union in the workplace and in the Labour Party. Unite’s general secretary Len McCluskey writing in the Guardian [29/10/13] put a brave face on it.
Seldom has one industrial dispute said so much about our society as the now concluded issue of the future of the Grangemouth refinery. Unite has reached an agreement with the owners, Ineos, which will guarantee the future of skilled and well-paid work at Grangemouth well into the future. In essence, it is not different from the difficult discussions my union and others have had with many employers during the current banking slump, working to keep jobs alive while adapting to the position some companies find themselves in. I went to Scotland last week to save those 800 jobs and keep a vital national asset open in the face of a real threat of closure from the employer. But I applaud our team on the spot for also fighting to maintain the pay and conditions of the people who pay their membership subscriptions. That is what trade unions do.
But “fighting to maintain the pay and conditions of the people who pay their membership subscriptions” is precisely what the “team on the spot” did not do. They were too busy politicking to do anything for the workforce. And the workers have paid the price. The ‘agreement’ involves no strikes for 3 years, bonuses cut, wages frozen, final salary scheme ended, and a two tier pay scale with those who originally accepted the management’s ‘offer’ getting more than those who rejected it. And in recognition of their culpability McCluskey has agreed to have no full time convenors operating in the plant. Deans’ resignation as convenor is therefore a bit of melodrama to save his political career (ironically he gets to keep the pension the rest of the workforce won’t now get) after the debacle at Grangemouth.
Management, on the other hand, have been given the carte blanche to screw the workers in any way they wish in future by Unite’s offer of “flexibility”. It is something Ineos will have to cash in on, as cheap American shale gas is going to mean increasing savings will have to be made over the next few years to maintain “competitiveness”. A new gas terminal is to be built to take American ethane so that profitability can be maintained.
Remnants of Defeat
From the foregoing account of how global capitalism operates in a crisis it is clear that the Grangemouth workers were going to be made to pay on one level or another. Unite’s antics though ensured that they paid more than was necessary. In the 2008 strike the Grangemouth plant was not alone but part of a general movement of other workers around the country. As a result Ineos postponed the attacks on their pensions and they even gained a higher wage increase. Even in the current showdown petrol tanker drivers came to offer solidarity at the gates to the plant. Unite’s failure to recognise how desperate the situation was until it was too late however meant that the surrender was total.
But Grangemouth workers are not the only ones that have been affected. This is a setback to add to a thousand other such setbacks for the working class as a whole. If workers in a strategically important plant like Grangemouth can be treated like this capitalists around the world will be rubbing their hands at the prospect of inflicting more pain on workers everywhere.
What Grangemouth illustrates is that any permanent organisation like a trades union is compelled (whatever the intentions of the actors) to engage with capital on its terms. “Engaging with capital on its terms” means not only accepting all legal restrictions on struggle, but increasingly operating as part of the state apparatus in advanced capitalist economies. Currently we (as a class) are still in the position of being on the retreat and unions like Unite are not even useful at conducting that retreat. Their aims, as Unite have shown here, are no longer simply those of their members.
This condition will not last forever (but it will last longer than we would like). The contradictions of capitalism don’t go away and history does not stand still. Once austerity has delivered only more and more misery and the non-integration of young (ever better-educated) workers into meaningful productive work for year after year continues, we will see movements which spring up on the streets rather than in the workplaces. These movements (like the Occupy Movement, the indignados or even the Arab Spring will however only pose the question of "anti-capitalism". It will have to be answered by those who are still in workplaces who can paralyse the system by not producing its commodities. Will the unions lead such a movement? Not likely. Mass strikes will take on their own character and their own structures (no need to demand for the TUC to call a general strike as the Trotskyists do). Mass strikes don't arrive according to anybody’s timetable but when they do they will once again bring into being assemblies, councils and other class-wide bodies. And that’s where the fight for a truly different way of life can begin.
JockStart here...
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Comments
I´ll paste an article from the time of 2008 strike, that shows how much the dominant class is internacionalized. Other countries sent oil (65000b.) to Scotland "in solidarity". That makes me thing that oil strikes must be internacionally organized...
see:
"Grangemouth dispute: Ships head for Scotland with
supplies
Tankers laden with fuels to relieve situation.
Inaccurate media reports corrected...
Commenting on the Grangemouth dispute, First Minister
Alex Salmond said: "From across Europe, unprecedented
supplies of additional fuel are arriving in, and
heading for, the Forth over the coming days to make up
for the loss of production at Grangemouth.
"This will provide extra reassurance for consumers and
businesses alike as we look ahead to the coming
working week.
"And the Border Thistle tanker, carrying 3,000 tonnes
of diesel and kerosene, left Grangemouth this morning
and is due to arrive in Aberdeen at 6pm.
"What must happen now is that the two parties engage
in discussions to resolve the dispute as quickly as
possible. In that light, today's remarks by Phil
McNulty of Unite that they want a period of
reflection, with no plans for an escalation or new
strike, and by Tom Crotty of Ineos that they will get
Grangemouth fully up and running as fast as possible
after the strike, are welcome."
As well as the Border Thistle tanker from Grangemouth,
seven shipments are arriving in the Forth over the
weekend and the early part of the week ahead,
containing nearly 65,000 tonnes of fuel. These are:
· Antares from Teesport - 5,700 tonnes - Diesel and
Kerosene
· BIT Octania from Gothenburg - 10,000 tonnes - Diesel
· Alsterstern from Amsterdam - 12-14,000 tonnes -
Diesel
· Bro Developer from Rotterdam - 14,000 tonnes -
Diesel
· Audacity from Immingham - 1,850 tonnes - Motorspirit
· Anefani from Rotterdam - 14,000 tonnes - Diesel
· Humber Fisher from Teesport - 4,000 tonnes - Diesel
and Kerosene
On an average day, Scotland consumes around 6,000
tonnes of diesel fuel - so these additional imports
over the coming days represent nearly 10 days of
normal supply."
Thnaks for that Comuna. Agreed. Do you have information on the situation in the oil industry in Brazil?
This condition will not last forever (but it will last longer than we would like). The contradictions of capitalism don’t go away and history does not stand still. Once austerity has delivered only more and more misery and the non-integration of young (ever better-educated) workers into meaningful productive work for year after year continues, we will see movements which spring up on the streets rather than in the workplaces. These movements (like the Occupy Movement, the indignados or even the Arab Spring will however only pose the question of "anti-capitalism". It will have to be answered by those who are still in workplaces who can paralyse the system by not producing its commodities. Will the unions lead such a movement? Not likely. Mass strikes will take on their own character and their own structures (no need to demand for the TUC to call a general strike as the Trotskyists do). Mass strikes don't arrive according to anybody’s timetable but when they do they will once again bring into being assemblies, councils and other class-wide bodies. And that’s where the fight for a truly different way of life can begin. Jock I quote all this because it's very well said and I agree. Who wouldn't? And to sum up the achievement of anti- capitalist protests on the streets and link them to the future need and possibility (probability?) of an answer from workers in a position to paralyze commodity production, generate mass strikes and thus trigger the proletarian revolution (Yipee!) is excellent stuff. And clearly and briefly stated.