Grangemouth – a major defeat

Nationalise it!
Nationalise it!

One thing is clear from the recent dispute at the Grangemouth, on the Firth of Forth near Edinburgh, writes Alan Thornett: a major defeat has been inflicted on one of the best-organised workplaces in Scotland, and on Britain’s biggest union Unite, by the Swiss based oil company Ineos and its union bashing chief executive Jim Ratcliffe.

It is a victory that the employers and the government are exploiting to the full as far as their union bashing agenda is concerned. Unite is being painted (even more than usual) as a rogue union committed to ‘unacceptable and bullying tactics’ such as protesting outside the houses of managers who have just victimised trade union activists or are threatening to sack thousands of workers and destroy their lives. Vince Cable is to set up a review into ‘industrial intimidation’ that Cameron says could lead to a major review of industrial law and to new legislation if necessary.

Such allegations are scaremongering rubbish by a Tory-led Coalition with an anti-trade union agenda, and Unite has been right to denounce them as such. With the report date of the review close to the general election, it is clearly also a part of the Tory election campaign—with Vince Cable and the Lib Dems in full support.

To its great credit the Grangemouth workforce does, indeed, have a militant history—one which has produced some of the best pay and working conditions in Scotland. Nearly a 1,000 of the 1,300 directly employed workers on the site are unionised with a shop stewards committee of 60. There are 1,200 contract workers on the site, some of which are also unionised. In April 2008 the workforce struck for two days, after a 97% vote in favour of action, and successfully defended their pension scheme. The strike had resulted in petrol shortages across Scotland.

There are two distinct halves to the Grangemouth site: the petrochemical plant, which produces raw materials for the plastics industry, and the oil refinery which processes oil from the North Sea fields. The refinery supplies 70% of Scotland’s fuel, plus large quantities to Northern Ireland and Northern England. Both are now owned by Ineos and  previously by BP. The site represents a quarter of Scotland’s manufacturing output.

“Survival plan”

The recent dispute was triggered by a drive by Ineos to break down the wages and working conditions which had been established by the unions over a long period of time. They claimed that the site had lost £150m in the last four years and that this could not continue. There was, however, another agenda behind it, which was to create the conditions (from management’s point of view) to build and raise the money for a new facility to process shale gas from the USA.

The so-called ‘survival plan’ which Ineos forced through includes a three-year wage freeze, reduced shift allowances, the end of the final salary pension scheme, and a three-year no-strike agreement. Stephen Deans, the Unite official at the center of the dispute, who was also chair of the Falkirk constituency Labour Party, resigned his job at the site after intimidation by management and the threat of dismissal.

The response of most of the left to this defeat has been to denounce McCluskey as responsible. He is condemned (by the SWP and the SP for example) either for refusing to call for continued resistance or for a UCS style occupation of the site against the imposition of the plan.

The problem with this is that it is far from clear whether it was McCluskey who initiated the acceptance of the package or wshether the workforce would have voted for continued resistance in the unlikely event of him calling for it. There was not, for example, a core of militants, or a minority of stewards, calling for continued action. In fact it is not clear if at the point the ultimatum was accepted whether there was anyone calling for action.

This is not to say that the leaders of the major unions are not responsible for the situation of unions today. They clearly are. They are responsible for it historically and they are responsible for its continuation when they fail to support fight-back opportunities when they open up. Denouncing McCluskey, however, irrespective of the circumstances or the facts, does not advance the struggle to regenerate the unions very much.

In fact Mark Lyon, the Unite convenor for the whole the site, insists that he personally recommended acceptance of the ultimatum to a meeting of the stewards. The stewards were unanimous in supporting his recommendation and when it was put to a mass meeting of Unite members that meeting also accepted it unanimously. In fact there was applause and cheering as the vote was taken. Whilst this, no doubt, reflected relief that the plant would stay open, it must also have said something as far as the possibility of continued resistance was concerned.


Mark Lyon insists that McCluskey only supported the decision after it had been taken, and he continues to defend the decision he took. No one on the left, as far as I am aware, has taken Mark Lyon, or the stewards committee, to task for recommending acceptance the ultimatum, yet they must be at least as responsible as McCluskey, by any account available, for the final outcome.

Not that Lyons’s actions, or those of the stewards, were very surprising given the shock tactics employed by Ineos management and the ruthless way in which they were carried through—all of which were designed to give the maximum impression that they meant what they said.

Ratcliffe didn’t just threaten closure of the site in the event that his ultimatum was rejected. He closed both plants down a week in advance of his deadline (a costly procedure in such an industry) and sent the workforce home—imposing what was effectively a lockout. He then announced that the petrochemical plant would not reopen unless his terms were accepted and that the future of the refinery was also in jeopardy.

He told The Sunday Times: “This is not a bluff. The clock is ticking. Grangemouth could have a future, but that is absolutely in the hands of the workers. If we go down the wrong road, then I’m afraid this story will not have a happy ending.”

What also strongly played in Radcliffe’s favour was the wider fuel supply situation. He knew that there was enough refined fuel and other products at Grangemouth and available from other sources to avoid a crisis when Grangemouth closed. In fact he had been stockpiling for months to that end. That was why he was able to threaten to close the whole site, if necessary permanently, without causing a run on the pumps across Scotland and beyond.

There had been two Cobra meetings chaired by Cameron to discuss the supply situation in view of the closure of the refinery. As a result of these meeting Cameron was able to say, in answer to a parliamentary question from Tom Watson, that there would not be a petrol shortage with Grangemouth closed down. Cobra had also discussed contingency plans to deal with any chemical supply shortages arising from the closure of the petrochemical site.


The political situation in Scotland—with the Scottish and Westminster Governments competing for referendum votes—also played to Radcliffe’s advantage. It meant that he was able to get money from both of them for his shale gas development which he presented as the future of the site. He ended up with a £9m grant from Holyrood and a £125m loan guarantee from Westminster, which met the £130m he claimed to need.

The other factor which had opened the door for Radcliffe’s offensive against the unions were the actions of Ed Miliband in Falkirk West constituency Labour Party, which had led directly to the victimisation of Stephen Deans by Ineos management.

In July the Daily Mail launched a campaign (as the Daily Mail usually does) around allegations of corrupt practices used by Unite in the selection of the Labour candidate in the Falkirk West by election—which had been called following the resignation of Labour MP Eric Joyce who had been accused of violent behaviour. The allegation was that Unite had been attempting to rig the selection in favour of a candidate of its choice—Karie Murphy.

Miliband quickly intervened and suspended the constituency party. He also suspended Stephen Deans as constituency chair, and Karie Murphy as the prospective candidate. He went on to announce not only that there would be a LP inquiry into the allegations but that he was referring the whole matter to the police—who then opened their own investigation.

In September both the Labour Party and the police announced that they had found no wrongdoing either by Unite, Deans or Murphy. Miliband, however, was not going to settle for that. He went on to announce (with the full endorsement of Tony Blair) that the episode demonstrated that there was a problem with the link between Labour and the unions and that he intended to change it. There would, therefore, be a special conference early next year where changes would be proposed.

Miliband had managed to turn McCluskey’s commitment to the Labour Party and his attempt to promote LP membership through Unite to his own advantage and towards a Blairite initiative to loosen the link with the unions.

All this was, of course, was music to the ears of Ineos management, since it left Stephen Deans seriously exposed. They lost no time in suspending Deans from his job and launching their own inquiry into him claiming that they had grounds to believe that he may have used an Ineos email address to carry out Labour Party business. It was an act of blatant political victimisation directly facilitated by Ed Miliband.

Unite reacted strongly against this attack on Deans and balloted the membership for action in his defence. The result was an 81.4% voted for strike action and 90% for other forms of industrial action, on an 86% turnout. On October 11th Unite duly served seven days notice of industrial action on Ineos in line with the ballot. There would be an overtime ban and a work to rule and a three-day walkout starting on Sunday 20 October.

Management walk-out

The response of Ineos to this (as described above) was to close the whole site down, lock out the entire workforce and issue threats of closure. Talks were held at ACAS over the victimisation of Deans but were aborted on October 15th when management walked out—according to Unite just as a settlement was about to have been reached.

It was quickly clear, however, why Ineos had walked out. Ratcliffe was dramatically upping the stakes. With the site at a standstill he was pushing the issue of Deans to one side and putting centre stage the issue of the survival of the site and a ‘survival plan’ of new terms and conditions. If these conditions were not accepted, he said, the petrochemical plant would not reopen, and probably the refinery as well.

Ineos, moreover, intended to go over the head of the union and directly to the workforce with the plan and with a financial inducement to accept. On October 16th they sent a letter to all 1,350 workers at the site asking them to indicate their acceptance of the plan by Monday 21 October. If they voted to accept the new conditions they would receive a sweetener payment of up to £15,000.

Unite’s reaction to this letter was to call a mass meeting of members the next day which voted to reject the ultimatum in the letter and to call on all workers to refuse to sign it. Unite also withdrew the strike notice over Stephen Deans. Instead they held a demonstration and rally in his support, on the day the strike over him would have started, with speakers from the Scottish Parliament and STUC. It was an acceptance that this had been overtaken by the new development.

On Tuesday October 22nd Ineos announced that the survival package had been rejected by the workforce, which was remarkable in the circumstances. A total of 665 workers had rejected the ultimatum by the deadline the previous evening. This represented 70% of the union members and 50% of the total workforce.

Next day Ratcliffe announced that as a result of the vote its shareholders (i.e. him) Ineos had decided that the petrochemical plant would now close permanently and that receivers would be called in forthwith. The oil refinery would also remain shut, whilst Ineos contemplated its future.

This was the point at which everything changed as far as Unite was concerned. By 3pm that afternoon Unite, through its Scottish secretary, announced, in effect, that it was prepared to accept the new terms unconditionally if Ineos reversed it decision and kept the site open. A mass meeting of Unite members (as described above) endorsed this and Ineos, unsurprisingly, soon agreed.

Could more have been done by Unite to hold the line against Ratcliffe? It probably could. But such closure ultimatums, particularly in strategic industries, have always been difficult to oppose even in more militant times. McCluskey had clearly lost touch with reality when he said (on the Politics Show) that the outcome of the dispute had not been a defeat for his union. That does not mean, however, that he could have changed the outcome of the dispute once the ultimatum was delivered.

Is the Grangemouth site now safe in today’s market/political conditions? Of course not. And certainly not by  shale gas from the USA.


The only thing which would have secured its future would have been its nationalisation by the Scottish Government in the way it recently nationalised Prestwick Airport. Yet the only thing which Alex Salmond was interested in when he came rushing from the SNP conference in Perth into the Grangemouth situation—along with David Cameron and Ed Davey—was finding a private buyer for the site (in particular PetroChina which already had shares in Ineos) and stuffing them with money until they bought it.

It also shows the centrality of the demand for the nationalision of the energy industry. McCluskey did call upon the Scottish Government to nationalise Grangemouth but only as a last resort and after Ratcliffe had done his worst. The demand for nationalisation needs to be much more central to the work and perspectives of the unions particularly in industries such as energy. This means not only the regeneration of the unions but the development of a more politically based trade unionism and a stronger political alternative to the left of Labour.

There is another very good reason for the nationalisation of energy industry. That is the wider issue of climate change and the need for a dramatic cut back in the use of fossil fuel. Ultimately if the planet is to have a future the fossil fuel industry can’t. This raises the need for a long term energy policy for Scotland which could develop its vast renewable energy capacity and administer a change over to renewables from fossil fuels in a away that can safeguard the jobs and working conditions of the existing workforce. Only a nationalised framework under popular control can achieve such an end.


  1. The economic and political background
    In an article on 31 October in the Oil and Gas website, Oil and Gas Refining overcapacity hits oil majors, they point out the following:
    Squeezed margins in the global refining industry are hurting the world’s largest oil companies, as Royal Dutch Shell, Total and ExxonMobil all blamed poor quarterly earnings on a decline in their downstream businesses. Results from Shell were the most disappointing Thursday, as its profit dropped almost a third to $4.5bn. ExxonMobil’s profit fell 18 per cent to $7.87bn, while Total’s declined almost a fifth to €2.72bn. All the majors have been hit by refinery overcapacity and weak demand for petrol and diesel in slowing western economies, which has hit earnings in their downstream – refining and marketing – divisions.
    The problem is most striking in Europe, despite refinery closures that have taken some 1.7m barrels a day of capacity out of the system since 2008. Figures from the International Energy Agency show European demand for refined products will average 13.5m b/d, almost 2m b/d less than in 2008.
    This weakening demand has coincided with the construction of a new wave of giant refineries in Asia and the Middle East that are putting pressure on older and less sophisticated plants in more mature markets. The IEA says global crude oil distillation capacity is set to rise from 86m b/d in 2005 to 101m b/d by 2017 once all the planned new capacity comes on stream.
    Once we have grasped this global economic picture then it is clear that Len McCluskey’s capitulation and betrayal at Grangemouth has only “saved the jobs” of these workers in the short term. We can clearly dub him a class traitor on the definition we supplied for our obituary to Jimmy Reid in Socialist Fight No 5:
    A class traitor is someone who betrays the long-term interests of the whole class, and that class is globally constituted with national sections, a few temporary concessions to a local workforce to ‘outwit the class struggle’ in no way excuses this treachery. Anti-EEC/EU economic nationalism was central to Reid’s politics and campaigns … Clearly capitalisms as a whole was greatly assisted by this work-in which removed some of the most militant workers from the political confrontation with Ted Heath.
    As Trotsky observed in 1930: “The trade union bureaucracy is the most powerful instrument for your oppression by the bourgeois state. Power must be wrested from the hands of the bourgeoisie and for that its principal agent, the trade union bureaucracy, must be overthrown.” And, as Rob Sewell observes, the sell-out at Grangemouth was foreshadowed by McCluskey’s earlier betrayals; the deal at Vauxhall on Merseyside, where the workers were forced to accept big changes to their terms and conditions particularly for new starters in return for keeping their jobs, was an obvious example. Similarly with the defeat of Unite over the British Airways dispute, where again the workers were forced to grant significant working changes to keep their jobs.
    Politically we must look at the whole Labour movement and how the machinations of the existing leadership of the working class, both the trade union bureaucracy and the Labour party leadership, have conspired together to land these blows on the working class. As Trotsky observed later in that same article: “The Labour Party, the trade unions – these are not two principles, they are only a technical division of labor. Together they are the fundamental support of the domination of the English bourgeoisie.”
    These betrayals were procured by Ed Miliband and the Labour party leaders who could have instantly saved the Royal Mail by promising re-nationalisation. An occupation of Grangemouth under workers’ control might well have forced Miliband and Alex Salmond to promise nationalisation also. Miliband is still committed to the defence of capitalism in lockstep with the TU bureaucracy from right to left despite his recent feign to the left. The conflicts between McCluskey and Miliband over Falkirk and the trade union link played a central part in this dispute.
    Miliband succumbed to Cameron’s jibes that he was in the pay of the trade unions by attacking the constituency party at Falkirk and by seeking to destroy the link with the trade unions, the historic road for the working class to exert some pressure on the Labour party, however bureaucratised this link is. Miliband handed “information” about vote rigging to the police and a member of his own party to Ineos on a plate. By signalling publicly that Labour was going to throw Grangemouth Convenor Stevie Deans to the wolves over the Falkirk fiasco to inflict a blow on McCluskey, Jim Ratcliffe was given the chance to mount his attack in the way he did. Ratcliffe clearly had the measure of McCluskey and called his bluff.

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