Re: Grangemouth Plant Closes
Quote:
Originally Posted by
csgohan4
But it's still significant enought to shut the plant, it's more than your pocket money for sure
£120M a year losses, £8M a year potential maximum from chopping £10K off each worker.
Would *you* agree to £10K less overnight? Don't have any commitments like rent or mortgage?
And you think the factory would have been open at £112M per year lost, but closed at £120M per year lost?
Re: Grangemouth Plant Closes
Quote:
Originally Posted by
directhex
£120M a year losses, £8M a year potential maximum from chopping £10K off each worker.
Would *you* agree to £10K less overnight? Don't have any commitments like rent or mortgage?
And you think the factory would have been open at £112M per year lost, but closed at £120M per year lost?
If it's more than the minimum wage and benefits I would, better than being unemployed, I don't think they are earning peanuts given it's a specialised sector.
Re: Grangemouth Plant Closes
Quote:
Originally Posted by
directhex
£120M a year losses, £8M a year potential maximum from chopping £10K off each worker.
Would *you* agree to £10K less overnight? Don't have any commitments like rent or mortgage?
And you think the factory would have been open at £112M per year lost, but closed at £120M per year lost?
It wasn't just pay, the real problem was the pension, as it is at a lot of industrial sites (and everywhere else) that has these issues. People retiring on fat (these guys were on an amazing final salary deal) pensions, which were unsustainable. Now you might argue that thats managements fault for drinking the pension advisors kool aid in the 70s & 80-s, and I'd probably agree but the fact remains its a huge problem. Bear in mind to give a 60 year old a 40k pension you need capital of around £1.3m, before you start taking into account minimum benefit periods, the fact they were probably allowed to retire at 50 and index linking.
Dropping these kinds of schemes (and the consequent cashflow implications of having to make up for nonexistent investment gains to keep them current) can save businesses literally tens of millions of £ a year.
You've also got to bear in mind the history here - they were last out on strike in 2008 because they didn't want to pay 6% into the final salary scheme.
Also, £120m sounds like a lot, but when you think they're running 210,000 barrells a day through the site (according to wikipedia) its not a lot of money. (£68/barrell for brent crude atm = £14.3m/day in input costs)
Re: Grangemouth Plant Closes
Quote:
Originally Posted by
csgohan4
If it's more than the minimum wage and benefits I would, better than being unemployed, I don't think they are earning peanuts given it's a specialised sector.
I think your missing the point a bit. You take out a mortgage based on your salary (and in some cases your pension). And this was my point earlier, I think what they were asking was excessive given the short time frame.
These people would be taking a huge cut and possibly could not have afforded there mortgage or other commitments. Yes it is more than jobseekers and benefits (in most cases) but that's not really the point. Otherwise we should live in a communist state where everyone earns the same wage regardless of their job/expertise.
Managements bad planning has come to the fore here. And its the workers who will pay the ultimate price. They set the pension and salaries up in the first place.
Re: Grangemouth Plant Closes
Quote:
Originally Posted by
neonplanet40
I think your missing the point a bit. You take out a mortgage based on your salary (and in some cases your pension). And this was my point earlier, I think what they were asking was excessive given the short time frame.
These people would be taking a huge cut and possibly could not have afforded there mortgage or other commitments. Yes it is more than jobseekers and benefits (in most cases) but that's not really the point. Otherwise we should live in a communist state where everyone earns the same wage regardless of their job/expertise.
Managements bad planning has come to the fore here. And its the workers who will pay the ultimate price. They set the pension and salaries up in the first place.
Of course when people take mortgages these are based on your current salary, however this is about sustainability and lack of understanding or will to understand by the Unions and the Employees, it has nothing to do with what workers did when they entered mortgages. Pay is a dynamic structure, you get pay rise as well as pay cut or worse unemployed, it comes with the territory when you get employed, mortgage or not. Whether they can pay it or not is not being considered in this thread, but the reasoning to why the PLant is closing the Unions.
It is true that the management has a part to play, however they were trying to adapt to make the pensions and wages sustainable.
You could argue that the company failed to adapt quicker and make other profitable ventures as well as forsee this problem given the recession has been in progress for some time.
Both the company and Employee's obviously have their own agenda, their own bank balance, but ultimately if you work together both will win. When both have issues and refuse to budge, that is where the issue is, in this case the union was clearly made clear of the implications of striking and refusing this deal to sustain the company and continue jobs and pay and didn't heed the warning.
However the Unions and employees didn't see this and didn't want to budge on current negotiations. If you were going to strike and were told that the company were likely to close because of it, you strike anyways, what does that show of the both the Unions and employees?
Re: Grangemouth Plant Closes
To be honest I hope that the people find something else or the government finds a buyer.
Re: Grangemouth Plant Closes
Quote:
Originally Posted by
neonplanet40
I think your missing the point a bit. You take out a mortgage based on your salary (and in some cases your pension). And this was my point earlier, I think what they were asking was excessive given the short time frame.
Vicious cycle though. Get nice paypacket thanks to unions. Buy big house on high mortgage. Get bigger paypacket the next year thanks to unions - move house to even bigger place. Take any responsibility like cutting salary or even taking unemployment insurance when you work in a specialised field and your company is losing money.... nahhhhh.
Sure the company had other problems, but having large staff bills kills any kind of chance of a refinance / rescue package. Overheads kill.
Re: Grangemouth Plant Closes
But this isn't even a case of bigger pay packet year by year. It was to have such a large 'chunk' taken off in a 2 month period. That is quite a leap. And then there is the pension.
People here say the pension was very generous etc etc and yes it was/is. But that's what they signed up too. It is not their fault that it was created.
As a teacher I have had my pension changed and I am not happy. But this is quite a bit worse.
Maybe if they had tried to scale this it would have been better.
Re: Grangemouth Plant Closes
Quote:
Originally Posted by
directhex
Not to mention the sums don't add up, of course. Ineos say the plant is losing £10M/month. But the 800 workers taking even a £10K/year cut would only save £8M/yr.
But by all means, blame it on greedy unions.
As I understand it, and I'm no expert, the situation is rather more complex than that.
The problem, as I understand it, is that the plant, in it's current configuration and with current contracts/market prices, is simply not economic to run. However, it could be made to be so, and indeed be quite lucrative in the future. But to do it, it needs to drastically cut costs, and that means importing the basic ethane feed stock from the US. And to do that requires an investment of about £300 million to build the port facilities necessary to make that workable.
So, the argument is about what costs, terms and conditions, shift patterns, bonus entitlements etc will be going forward, to allow a 9 year progrsm of investing £300m to go ahead.
As I understand it, the plant as it is is just not viable any more, because of the prices of those imported feed stocks, which this plant cannot use without the investment.
So it's not just about current annual operating losses, though they're bad enough. It's about being secure enough to be prepared to risk a £300m investment, which the company was prepared to do .... but not under current conditions.
There are, therefore, three basic scenarios
- invest, change conditions, become profitable in about 2022.
- close
- don't invest, and continue losing £117m / year, with no likelihood of improvement.
No company in it's right mind will opt for the third. And would probably go broke if it did.
I think the unions, and those union members that voted to reject the proffered deal, badly misread the situation. They saw the company's stance of threatening closure as a bluff and called it. Sadly, especially for the nearly 50% that didn't vote to reject it, it was no bluff.
There is a lesson in this, though. Companies work best when unions and management work together, and are realistic about expectations. But unions need to realise that jobs are not guaranteed, that there's no God-given right for conditions or circumstances to remain as they were because that's how they always were, and that the existence of jobs in a company is not an immutable law of nature or physics.
This is not the first time I've seen companies close because unions played hardball and didn't believe management's claim that demands were simply unaffordable. I worked on one such incident about 30 years ago, when we were called in as the receiver, after unions rejected a last-ditch offer, without which management said "we'll close". The union called that as a bluff too, but in that case, company finances were dire, and if management had not called in the receiver when they did, they could have ended up personally, and potentially criminally, liable, for knowlingly trading when insolvent. They had maybe 24 hours before that was the case.
Even then, the idiots in the union thought it was a bluff and played hardball with the receiver, too. But the receiver has quite rigidly defined legal duties. We would have sold the company on as a going concern had it been possible, but short of a rapid about-face by the union, it was not possible. Result? Company closed, assets valued and sold. Employees all out of work. It could have been rescued, even after receivers went in, under new ownership/management, but wasn't, due entirely to union obstinacy, ignorance, and point-bland refusal to face facts, even when told by an independent receiver.
Unions often do a positive job to represent their members, but those milutant unions of the 60's through to early 80's could be a very destructive force, and in the case I personally saw, from the inside as part of the team of receivers, a couple of hundred employees lost their jobs entirely because of union instransigence, and refusal to accept that the facts were what they were.
Note. The owners of that firm did well. The firms debts were cleared, the site was worth FAR more to developers than it was as a factory, and they ended up with millions in their pockets, and emigrated. The site was redeveloped, and no doubt the developers trousered a fortune, too. The employees? Dole queue.
And before anyone says it, no, that wasn't the owner's plan. It was a family business, and if that was the plan, they could have done it a couple of years earlier, not suffered the hassle of two years plus of running at a loss, or the costs of doing that, and just closed up and sold off. Persevering in trying to keep it open cost them over a million in unnecessary losses, and 30+ years ago, that wasn't chump change. They wanted to keep the place running. The union just wouldn't let it.
Re: Grangemouth Plant Closes
Quote:
Originally Posted by
directhex
£120M a year losses, £8M a year potential maximum from chopping £10K off each worker.
Would *you* agree to £10K less overnight? Don't have any commitments like rent or mortgage?
And you think the factory would have been open at £112M per year lost, but closed at £120M per year lost?
£10k off each worker is £137 million - they have 1370 workers , 1/2 are directly employed the others are contractors.
Re: Grangemouth Plant Closes
Quote:
Originally Posted by
directhex
Bear in mind an extremely common tactic in Union negotiation cases is to allow the company to fold, then for the same management to buy it up again under a new name, allowing them to fire all existing staff without consequence. This was used e.g. for Hostess vs Bakers Union, in the USA.
Not in the UK, or EU
covered by TUPE
http://en.wikipedia.org/wiki/Transfe...gulations_2006
Re: Grangemouth Plant Closes
as Saracen very eloquently put - some unions work well with companies - others , sadly, are far too `extremist` with 1970`s attitudes , 40 odd years later , which in this day and age wont cut it. Unite did the ` we want this and if you don't we strike` , so now the company is closing down.
Re: Grangemouth Plant Closes
Quote:
Originally Posted by
neonplanet40
But this isn't even a case of bigger pay packet year by year. It was to have such a large 'chunk' taken off in a 2 month period. That is quite a leap. And then there is the pension.
People here say the pension was very generous etc etc and yes it was/is. But that's what they signed up too. It is not their fault that it was created.
As a teacher I have had my pension changed and I am not happy. But this is quite a bit worse.
Maybe if they had tried to scale this it would have been better.
No one is happy with having their pensions cut. Look at the Doctors and nurses who were employed and had their pensions (Goalposts) changed very often now. Gone now is the final year salary pensions and now is based on average earnings which will save the government money and a slap in the face for x years of service to the NHS.
On the one hand it will make the pension scheme sustainable, but on the other hand drive down morale, loyalty and perhaps make it less lucrative to stay on the NHS pensions, driving down contributions and quite possibly another reduction in the pension within the next 10 years or so.
I know some of which will leave the NHS pension scheme and invest in private more secure pensions which don't change with a drop of a hat.
Unforunately having it all and saving money are not compatible and this was the only option in both the Grangemount and NHS Pensions debate.
In regards to Sarcen's post, it's sad we are seeing these kind of standoffs from the Unions of the 21st Century. If they truly represented the workers, then surely unemployment and companies closing is the last resort. This idea of calling one's bluff is not negotiating, but blackmail and taking the company for ransom.
I find it actually disgusting that only half rejected and now the other half will lose their jobs because they didn't join or agree with the Unions plans.
You know what is the worse thing about it, the Union will always be in a job, but the people they represent are now unemployed and face hardship, with now the prospect of losing everything because one's stubbourness to stand firm and say no when they were clearly told that the firm will close if this happens. It really is common sense and people playing for power and greed now, now many more will suffer, especially those that never agreed or joined this particualr union.
Heads should roll at that Union for allowing this to happen, can someone enlighten us to how much the subscription fees are to this Union out of curiosity.
Re: Grangemouth Plant Closes
Quote:
Originally Posted by
csgohan4
Heads should roll at that Union for allowing this to happen, can someone enlighten us to how much the subscription fees are to this Union out of curiosity.
You're kidding right? They are the corrupt beggers who tried to stich up that Falkirk seat thing.
Re: Grangemouth Plant Closes
Here is the reasons why people join Unite taken from their website:
Unite is the largest trade union in he UK and Ireland with around 1.42 million members across 23 different private, public and voluntary sectors including manufacturing, public services, transport, food, finance and construction.
Check out below 10 good reasons why you should join Unite.
Join Unite - have a voice, take action and play a part...Unite the union - the union for all.
1: You can earn more - workers in unionised workplaces earn on average eight percent more.
Despite not being sustainable and the company you work for may close, we will fight for your cause
2: You could get more holiday - Unite has won better holidays for many of its members in places where it organises.
More holiday less work, yay
3: You are less likely to be sacked – trade union members are half as likely to be sacked than non-union members.
We Will make your life hell if you do and we will strike strike strike
4: You get more and better training – Unite has fully trained learning reps to ensure you update your skills.
We will teach you in how to strike and will give you all the materials for the picket lines
5: If you do get injured you can get better compensation – Unite wins millions of pounds for members and their families each year through its legal help.
We will get you the best injury specialist lawyers your 12 pound a month Subs can afford
6: You are less likely to be discriminated against than non-union colleagues – Unite constantly campaigns for tougher anti-discrimination laws.
Because Unite is the alpha species and we will strike against those that oppose us
7: You are less likely to be injured – unionised workplaces have trained health and safety reps to ensure employers meet their responsibilities.
We give you all the health and safety paperwork to burden your employers with, so you can go off sick and claim claim claim
8: You will get better maternity or paternity leave – workers in unionised workplaces enjoy better leave than just the legal minimum.
Simple, give us more holidays or we strike
9: More job security – The union challenges job cuts and campaigns when workplaces are under threat of closure.
We care for you not the employer, even though they give you your wages, Disclaimer: we are not responsible for you losing your job if you employer wasn't bluffing
10: Be part of an organisation that champions fairness - Unite uses its influence to challenge injustice at work and in our communities.
There is only 1 fairness, our Subscription fees and of course your bank balance, everything else is a bonus
It's a shame their manifesto for Job security in this case has gone bottoms up and I doubt it is unfairness that lead to the plant closing, at least from the Plant owners perspective.
I wonder if they will refund their membership for misrepresentation as they clearly lost the bet they were bluffing. Playing hardball in this case doesn't always work. Perhaps in bigger companies like TFL that might work with private companies and big business pressuring TFL into giving them more money e.t.c
But really Unions should not be able to hold Companies to ransom when they fail to look at both sides of the coin and only want their agenda pushed through, Whatever the cost
While I may not Agree with everything Margaret Thatcher did, reducing the power of Unions was her breakfast, lunch and dinner and I only wish the Prime Minister was Bold enough.
The fact Labour are in bed with Unite gives it a further tarnished reputation and one that makes me uneasy to vote for them.
Re: Grangemouth Plant Closes
Quote:
Originally Posted by
HalloweenJack
£10k off each worker is £137 million - they have 1370 workers , 1/2 are directly employed the others are contractors.
You dropped a decimal point there. And contractors do whatever you tell them to, full time staff are the only ones with leverage