If this is a case of brinkmanship, don’t expect Jim Ratcliffe to blink first. The secretive tycoon behind Ineos needed cast-iron nerves to build his empire, borrowing billions of pounds to buy up dozens of unwanted manufacturing plants when debt was cheap. Then, when the financial crisis hit, he stood before 600 bankers to persuade them to cut him some slack. Compared with that, I imagine Ratcliffe will take the closure of one facility out of 51 spanning 11 countries in his stride.
His refrain to Scottish engineers was a familiar one. Whenever businesses get into difficulty, shop-floor workers must share the pain. It happened five years ago, in a skirmish over the closure of the final-salary pension scheme. It has happened again, even though the wider Ineos Group is in great financial shape. In a global business, there’s no room for passengers.
It sounds brutal, but there is a reason why Ineos could be pieced together from the offcuts of famous industrial names such as BP, Dow, Bayer and BASF. Producing bulk chemicals is a grimy business with unpredictable margins, thanks to the fluctuating oil price. Keeping costs down takes huge investment. BP and the others would rather focus on something else.
Without a deal, the future of Grangemouth is bleak. Less than two years after the owner of the Coryton plant in Essex filed for insolvency, Britain’s refining capability is still dwindling. There is still overcapacity in Western Europe and American fuel prices mean it is easier to import. Consumers need only examine their heating bills to understand what becoming a net gas importer did to our energy industry. How to reverse the trend? Perhaps a coalition of the willing. That doesn’t sound like a description of Ratcliffe and Alex Salmond at the moment.