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Unite members at Grangemouth in 2013

Trade unions must learn lessons from Grangemouth setback

By Socialist Party Scotland. Posted 25th October 2013

Ineos and billionaire owner Jim Ratcliffe have announced a reversal of the company’s plan to shut the petrochemical plant at Grangemouth. This follows a significant defeat for Unite on workers’ terms and conditions, demanded by the brutal Ineos management as part of their “survival plan”. While playing Russian roulette with the lives of thousands of workers, the billionaire Ratcliffe was sailing his £130 million luxury yacht around the Mediterranean. He recently applied to build a £5 million mansion in Hampshire.

There were cheers at the mass meeting when the workers were told the plant would re-open. Having been told on Wednesday that 800 jobs were lost, it is understandable that the announcement was welcomed – at least for now. It will also bring relief to the around 2,000 sub-contracted workers at the site who were in the midst of being laid off.

Ineos had said they were going to liquidate the company that ran the petrochemical plant. This would have meant workers lost thousands, and in some cases tens of thousands of pounds, in redundancy payments. Under current statutory redundancy terms post-liquidation workers would have been entitled to a maximum of £13,500.

As part of the deal Ineos will be bailed out to the tune of £134 million in Scottish and UK government grants and loan guarantees. The company claims it needs this to ensure a £300 million investment at Grangemouth over the next few years. After claiming the business was on its knees, Ineos is now saying the site has a 15 to 20 year future ahead of it. This is further proof that the company was lying about the so-called “financial distress” of the plant.

If this u-turn by the bosses was a result of being forced into a retreat by collective trade union action by Unite members, including an occupation of the plant, the reopening of Grangemouth would be seen as a step forward by trade unionists at the plant and beyond. However, this was not the case. Instead Unite has agreed to sign up to the company’s “survival plan”. This includes no wage rises until 2016, cuts in bonuses resulting in a loss of up to £15,000, the tearing up of the final salary pension scheme, a three-year no-strike deal, and an end to full-time union conveners on site.

There was huge pressure on the shop stewards at Grangemouth following the closure announcement on Wednesday 23 October. More than half of the permanent workforce at the whole Grangemouth site had been told their jobs were gone. The oil refinery was closed. According to Ineos it would remain so, unless the union agreed to huge cuts in workers’ terms and conditions. The possibility of closure enduring was a real one. In addition, the Unite Scottish secretary, Pat Rafferty, supported by the Unite general secretary Len McCluskey, was at that point urging that the union sign up to the company’s demands.

In the absence of a fighting strategy by Unite to save the plant, including the occupation of the site and the building of a mass campaign across Scotland to demand that the Scottish/UK governments nationalise Grangemouth, the pressure proved too great for the shop stewards to resist. Nevertheless we recognise the commendable role the stewards and union activists have played at Grangemouth over the last years in defending trade union rights and conditions at the plant, which was emphasised by the successful strike in 2008.

This strength was also a key element in the victory of the construction electricians – ‘the Sparks’ – against the Besna contract in 2012. Balfour Beatty contract workers at the site were to strike, knowing that Ineos workers were likely to respect the picket line. Subsequently, the shop stewards also gave vital support to one of the Sparks, Stewart Hume, in his successful campaign against victimisation. They will be key to rebuilding trade union strength at Grangemouth following this defeat.

The union has suffered a significant setback at Grangemouth, which is one of the best trade union organised private sector workplaces in Scotland. 1,000 of the 1,350 permanent workers are in the union – as are many of the sub-contracted workers. Moreover, it’s a defeat that can also embolden other employers in seeking to attack wages and conditions and trade union rights, unless all the lessons of Grangemouth are learned by trade unionists.

What was the alternative?

What could have been done to avoid this situation and a defeat for the union at Grangemouth? There is no doubting that Ineos and Jim Ratcliffe are brutal employers. Following the defeat inflicted on Ratcliffe in 2008, after the 48-hour strike at Grangemouth in defence of the final salary pension scheme, the bosses had been preparing for a confrontation with the union.

A major campaign of victimisation against the union and a leading shop steward, Stevie Deans, has been on-going for months. Stevie was suspended in July. Then this was lifted following the threat of a walkout by Unite members at Grangemouth. Ineos then hired a private firm to investigate Stevie’s activities.

All this was against the backdrop of Labour’s suspension of Stevie Deans as chair of Falkirk Labour Party in June and a handing in of a dossier to the police urging an investigation into Unite, which emboldened the employers further. The union organised a ballot for strike action over Stevie’s victimisation by Ineos which saw an 81% vote in favour of strike action. A 48-hour strike was called for the 20/21 October.

There is clear evidence that Ineos, in all likelihood in conjunction with the UK government, had been preparing for a confrontation with the union. The stockpiling and the importation of fuel to mitigate the impact of the strike and the inevitable shutdown of the plant were at an advanced stage, even before the strike was announced. This alongside an attempt to decapitate the union leadership at the plant indicated the lengths the company was prepared to go.

In the run-up to the 48-hour strike Ineos announced they were going to put the plant into a prolonged “cold shutdown” rather than a short hot shutdown. In other words, a signal that they intended to keep the plant closed, effectively a lockout of the workers. In the run-up to the strike Ineos was claiming the plant was “in financial distress” and losing £10 million a month. They drew up a “survival plan” demanding major cuts to terms and conditions.

The response of Unite, mistakenly, was to call off the strike over Stevie Deans’ victimisation, offer no strikes until the end of 2013 and indicate that they wanted to negotiate changes in terms and conditions, rather than have them imposed by the company.

It’s clear that the Unite leadership in Scotland accepted the need for cuts to terms and conditions, but wanted to negotiate these rather than have draconian cuts imposed by the bosses. At best they hoped to mitigate the worst elements of the Ineos survival plan, not lead a mass campaign in opposition to Ratcliffe’s blackmail.

After talks broke down at Acas, the company said they intended to “go over the heads of the union” straight to the workers to ask them to sign up to new contracts on worse terms by 6pm on Monday 21 October. Unite and the shop stewards called on workers to refuse to sign and over 70% of trade union members at the site supported the union’s call. This indicates that pressure from the shop floor and the stewards changed the union’s direction at this stage.

On Wednesday 23 October at 10am the company announced the petrochemical plant would close permanently with the loss of 800 jobs. The oil refinery at Grangemouth would also remain shut. By 3pm that afternoon Unite, through its Scottish secretary, announced they had made a new offer to the company, effectively agreeing to sign up to the survival plan and huge cuts to terms and conditions at the plant.

Concession bargaining

On Thursday Len McCluskey came to Grangemouth to support the agreement. He argued that in a period of recession Unite had a responsibility to help companies survive. “My union is engaged with thousands of companies every day to negotiate plans to save jobs. There is nothing humiliating about negotiating plans to ensure jobs and communities are safe.”

We agree that trade unions should fight to ensure jobs and communities are safe. But that is not what the Unite leadership have done here. In reality this is nothing more than the failed policy of concession bargaining – a policy by trade unions of offering wage cuts, supporting cuts to pensions and even a long-term no-strike deal to “save” jobs. There are huge dangers for Unite if such a policy was to become the norm, rather than a policy of fighting against all cuts to members’ jobs and working conditions.

Socialist Party Scotland fully understands the huge pressures on trade unionists in this situation of savage capitalist austerity. Our members face similar pressures day in and day out representing workers as shop stewards, branch secretaries and union leaders.

There is no guarantee of a victory or even in the case of Grangemouth that a majority of workers with a gun to their heads would have supported a fighting strategy, given the fear over the plant closing. However, the tragedy of this situation is that Unite members were not offered a fighting strategy, other than to accept the cuts being demanded by the company.

In a conflict like Grangemouth, where the union is facing a company that is prepared to bring the union to its knees and impose savage cuts on workers’ conditions, only an all-out struggle on the industrial and political plane can offer a way forward.

Under the stewardship of Len McCluskey there has been a change in the culture of Unite. There have been important victories, including on the Besna and the blacklisting campaign among others. However, this wasn’t a ‘normal’ dispute and its clear that the Unite leadership was not prepared for an all-out struggle that was needed against this particularly vicious and brutal capitalist employer.

Following the announcement of the closure of the petrochemical plant Socialist Party Scotland wrote: “The next hours and days are vital in ensuring the building of a mass campaign to fight to save the Grangemouth plant and retain the jobs and terms and conditions of the workforce.

“An urgent mass meeting of Unite members at Grangemouth should be organised. The shop stewards at Grangemouth should draw up a plan of action to put to the workers to seek to defeat this act of corporate vandalism by Ineos.

“Decisive action by Unite, including the occupation of an appropriate part of the site, would gain mass support and apply huge political pressure on the Scottish government to carry through the nationalisation of the plant. Unite should now demand the nationalisation of Grangemouth.

“But Unite members at Grangemouth can’t be left to fight this struggle on their own. It’s one for the entire trade union movement in Scotland and beyond.

“The STUC should call an immediate ‘council of war’ of trade unions and shop stewards from across the trade union movement to plan a mass solidarity campaign, including calling a Scotland-wide demonstration in the next couple of weeks.”

A key demand

The occupation of part of the site and a clear call by Unite for the nationalisation of the Grangemouth plant would have gained mass support among the working class in Scotland and abroad. The Scottish government was, behind the scenes, discussing the possibility of bringing Grangemouth into public ownership.

The potential for a mass campaign, similar in its scale to the Upper Clyde Shipbuilders sit-in in the early 1970s was inherent in the explosive situation that existed around Grangemouth today. Just two weeks ago, Len McCluskey spoke at the Jimmy Reid Memorial Lecture in Glasgow. McCluskey cited Reid, who was a leader of the UCS work-in: “As a young shop steward on the Liverpool Docks, I remember Jimmy coming to address us during the UCS work-in. He lifted our spirits for our own struggles, by his words and his example.”

Yet, a mass struggle at Grangemouth could equally have lifted the spirits of the whole of the working class in Scotland and beyond with the real possibility of a victory, rather than a defeat and setback for the union.

Role of Labour

Without doubt the false policy of the Unite leadership towards the possibility of reclaiming the Labour party for trade union interests was also a contributory factor in not coming out in favour of nationalisation at an early stage. Labour’s refusal to advocate the public ownership of the plant and their general pro-capitalist policies are holding the union back.

In fact, Miliband was personally responsible for the victimisation of Stevie Deans and his only other contribution throughout the dispute was at the end to welcome the union’s concessions. This shows yet again that today Labour does not support workers in struggle and that Unite should come out clearly in favour of a new mass workers’ party, public ownership and a real political alternative to the austerity agenda.

Corporate lies

During these events at Grangemouth, Socialist Party Scotland has consistently demanded the opening of the books of Ineos and all its subsidiaries to scrutiny by the trade unions. This was even taken up by the Unite Scottish secretary in a BBC Radio Scotland interview when he called for “the books of Ineos to be open to trade union inspection”.

Big business employs many well-paid accountancy firms and lawyers to “massage” company figures, either to underestimate profits and exaggerate losses, or overstate profits to suit their purpose.

There is no doubt that Ineos’ claims that Grangemouth was a £10 million a month loss-making site was a central part of their propaganda in trying to force concessions from workers and to extract further public money from the Scottish and UK governments.

It’s very difficult for workers for get to the truth of the reality of corporate profits. This is doubly so in dealing with a company like Ineos who is particularly opaque and labyrinthine through the deliberate use of sub companies, including the use of off-shore tax havens to hide profits and avoid tax. Already in 2010 Ineos’ moved its headquarters from Britain to Switzerland to cut its tax bill.

Unite, however, asked Richard Murphy, an accountant and a campaigner against corporate tax-dodging to review Ineos’ public accounts, which themselves will not tell the true story. Murphy found Ineos Chemicals Grangemouth Ltd has added one-off measures to make the accounts look bad, including a write-off in the valuation of the petro-chemical plant – in other words it was worthless. The same petrochemical plant that is now described as having a bright future of at least 15 to 20 years.

Murphy found that Ineos accounts imply that they expect to make £500 million from Grangemouth alone by 2017 and that operating profits grew by 56% last year. Murphy says that Grangemouth chemicals made £7 million profit last year and £6 million the year before.

“Unlike any other company they decided to factor in investment as a loss,” said Murphy. “They are using accounting rules I don’t recognise. They are using numbers I can’t find in any actual published accounts.” Ineos internationally also made a profit of over £2 billion in 2012.

All this underlines the point that trade unions in struggle must demand that the bosses open the books to trade union inspection. This demand must be linked to campaigning for the nationalisation of the major corporation, whether profit or loss making, under democratic working class control and management.

Rebuild trade union rights

Socialist Party Scotland completely rejects the idea put about by the crowing capitalist media that the union has been smashed at Grangemouth. Unite has made a big mistake in signing up to a three-year no-strike deal at Grangemouth, they have also signed away an agreement that allowed for full time union representation on site. This will, in the short term, give the employer the upper hand. Further attacks on the union and the shop stewards and the rights of workers are possible. Against the backdrop of a no-strike agreement it is vital that Unite rebuilds its strength and its membership at Grangemouth and that it prepares to resist further attacks of the bosses.

As well as rebuilding its strength, the question of unofficial action can come to the fore. This is a tactic that must be consciously discussed and planned, where necessary, by workers at Grangemouth to help overcome the obstacle of the no-strike agreement.

The events at Grangemouth are a serious setback for Unite and the wider trade union movement. Many active Unite members will be shocked at what has happened. Nevertheless, the task now is to learn the lessons of this setback, to discuss what programme is needed to defeat these kinds of attacks, to work to ensure the rebuilding of trade union strength at Grangemouth and, over time, winning back what has been lost.