Forty-eight hours ago, it looked like a vital part of the Scottish economy could be shut down for good; today, the Grangemouth petrochemical complex is up and running again.
For the workers who feared for their jobs and security, it is a massive relief and an end to a stressful and turbulent week. Ineos, the owners of the plant, will now invest £300 million in the site and the vast majority of jobs look secure.
The price the workers have paid for this security is a pay freeze and an end to their final salary pensions. Their union Unite had fought furiously against these changes and kept fighting beyond the point where they should have realised they needed to compromise. Right across the country, millions of workers have had to accept pay freezes and reform to their pensions as the cost of keeping their jobs. Unite thought the workers at Grangemouth should be exempt from this trend but even some of its own members thought the union's position was naive. Finally, it has accepted the terms as the cost of saving the plant.
It was the right decision and the union has done what it should have done some time ago, although the management at Ineos should resist the temptation to gloat over what has happened as they have hardly covered themselves in glory. Not only has the company behaved in a high-handed manner towards its workers with its take-it-or-leave-it attitude, it has failed to dispel the suspicion it has not been entirely open about the real financial state of the plant. Even at this late stage we do not know which of the competing claims of profit and loss are true.
What we do know is that Ineos will now invest £300m to upgrade the plant, which is essential if it is to be able to import gas to replace the declining stock from the North Sea. The Scottish government has also said it will support the company's application for a £9m grant to finance a gas terminal and the UK government has approved a £125m loan guarantee facility.
Longer term, the plant is likely to face many challenges such as a decline in demand for the kind of plastic products it produces. The number of refineries in the UK has also been falling, thanks partly to competition from Asia and the Middle East.
However, the refined petrol and chemicals sector is still among the strongest in the Scottish economy and Grangemouth is a vital part of that. As the Ineos chairman Jim Ratcliffe said yesterday, the petrochemical complex represents an impressive set of assets and the staff an extremely capable group of people - it is just a pity that he did not say so sooner.
The key to ensuring Grangemouth can now capitalise on these assets will be continued investment, the ability to secure new raw materials and a period of stability in the relationship between managers and union. The union has done its bit by promising not to strike for three years and the company has done its by promising investment and it is a welcome relief after a dispute that has been a lesson in how not to handle industrial relations. The hope must be that, as the flares start to burn over the plant again, the foundations have been laid for a long-term, sustainable future.
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