How to Run a Refinery…?

December 29, 2019

Sustainability is one of the Lockout buzzwords and we are led to believe that the pension and benefits the Union has fairly bargained are no longer sustainable despite the Refinery’s record profits. While the Company chooses to point the finger at unionized employees and our collective agreement, instead let us focus on the internal practices of the Co-op Refinery and how they impact sustainability.

First, we need to answer the question, what is sustainability? It’s about how we navigate the future of the Co-op Refinery and remain competitive in the Energy Sector in a changing marketplace. The keys to remaining sustainable include high-quality products, market demand for the products, and a network to distribute products. Co-op Refinery ticks all those boxes, so now it’s just a matter of continuing to provide the products and services in a cost-effective manner.  

Competitiveness

We have all heard our Refinery Manager say he wants us to be “the last refinery standing”, yet every strategic decision suggests the Co-op is only trying to be like everyone else. 

The Company brings in an endless stream of expensive consultants in an attempt to drive the Refinery down to an industry standard.  For example, the Solomon Survey, the results of which tell us how to be like every other refinery, and does not consider our unique situation or unwritten intangibles. How do you compare the only co-operatively owned refinery to massive multi-nationals?

The Company has outsourced strategy and undertaken partnerships that make us vulnerable like everyone else. They are no longer capable of thinking for themselves and doing what’s best for the workers, Co-op, and FCL as a whole. We have lost our competitive advantage letting the competition catch up to us.  How can we be the last refinery standing if we do everything that everyone else does?  That would suggest if they die, we die.

Maintenance & Turnaround

If sustainability is contingent on cost savings, Co-op doesn’t have to look any further than the Maintenance and Turnaround budgets to save tens of millions of dollars every year.

Co-op went from under-planning turnarounds and getting everything done in four weeks to creating a new department of fifteen out-of-scope employees that only plan turnarounds year-round. Now turnarounds are over-planned to do half as much work with twice as many people for way more money in twice the time!

If that wasn’t bad enough, our valuable and highly-skilled unionized workforce sit on their hands while the work is contracted out to multi-national companies. There was massive value in having non-maintenance workers backfill the manpower requirements needed to pull off a turnaround. It was an educational, team bonding experience that benefited the employees and Company.

Even day-to-day maintenance work has become more expensive with the additional layers added by the Planning & Scheduling departments. Almost thirty out-of-scope employees are dedicated to solely planning work that was historically handled only by a handful of competent workers before our qualified maintenance workers got the work order to commence repairs. Now, our departments collectively sit around and wait for the planned and scheduled, only to have to send it back for re-scope.

Training

Our Fire & Safety members used to instruct the safety training courses at the Refinery.  Instead, they are now led by a third party off-site. Additional costs and resources, not to mention knowledge, are outsourced to more contractors.

They also hired out-of-scope Process Trainers to fill the roles Operators have done successfully for decades. This additional layer is another additional cost, and it degrades the level of training new or progressing operators are receiving. The long-term costs of this decision could be very detrimental as each new crop of operators is less and less competent.

Stores

Then they moved all our inventory and parts off-site. Now, instead of vital and important parts being a quick trip to the Stores window, every job needs to have parts transported to the plant from the RBO. Additionally, fewer and fewer replacement parts are kept in inventory and important pieces of equipment sit isolated for weeks as we wait on parts from suppliers.

Business Continuity Plan

If the key to sustainability is to become more cost-effective, why are they wasting hundreds of millions of dollars to run their BCP lockout plan? Those costs alone dwarf any savings they would see from gutting our pension and savings plans.

The list of expenses associated with the lockout to run their BCP is mind-boggling. The trailer complex, temporary fencing, hundreds of security guards and vehicles, helicopters, food, charter buses and hotel accommodations, lawyers, marketing blitz, and extra manpower costs, bills add up quickly.

Not only does BCP cost money, it also costs profits in the short and long term. Production is down, fuel deliveries are delayed, equipment integrity is compromised, and the union-led boycott has impacted market share.

The items that remain on the bargaining table would not result in any significant savings compared to the BCP costs. And we have yet to factor in the long-term damage the lockout will have on the workplace and Western Canadian market share.

. . .

These are just a few areas where money can be saved. Reality breeds a much longer list. Most of these business-transforming decisions occurred after 2013, and it would be hard to find someone outside of the Refinery Leadership Team that would say our workplace has improved over those seven years.

Despite poor strategy, the Refinery managed to earn more than $2,500,000,000 in profits in the last three years.  These profits well exceeded projections, with the last two years recorded as the most profitable in the refinery’s 84-year history. Yet they continue to demand concessions from workers that would amount to approximately $23 million a year. Our profits from just the last three years would pay for the savings plan and fully fund our pension for 108 years!

How can Co-op be the last refinery standing when it is constantly at war with its own employees? Do you believe a company that is willing to throw that much money around on a BCP is not sustainable? Do you believe that a company that has never lost money will somehow go from record profits to shutting its doors if employees don’t agree to rollbacks? Do you believe that pulling 23 million a year out of our members‘ pockets will make the Refinery sustainable?

None of this is about sustainability. It’s a campaign to bust the union and hurt workers and their families. That’s not co-operative values.