Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Philadelphia refinery workers plan for uncertain future after jobs go up in smoke

CommoditiesJun 28, 2019 11:05AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: A worker leaves the Philadelphia Energy Solutions oil refinery carrying personal items in Philadelphia

By Jarrett Renshaw and Laila Kearney

PHILADELPHIA (Reuters) - At Erin Pub, a classic Irish neighborhood bar in Norwood, Pennsylvania, dozens of Philadelphia Energy Solutions Inc's unionized employees crammed around the bar on Wednesday night, toasting to their friendships after learning that day of plans to close the refinery permanently after a devastating fire less than a week earlier.

They were openly worried about what the job loss would mean for their lives and their families. The refinery, the biggest on the East Coast, employed more than 1,000 people, including more than 600 unionized workers. Most were told their jobs would end by mid July, while others would stay for two weeks beyond that.

"I have a kid I’m about to put through college, and I have no idea how I’m going to do that now,” said one worker, who had been with the refinery for more than a decade and who asked not to be identified.

The workers, both union and non-union, are not expected to get severance packages or health benefits, dumping them into a shrinking energy workforce without a parachute. In the months leading up the closure, the company saved cash by laying off a number of salaried employees, all whom received standard severance packages, two sources familiar with the company told Reuters.

“We have some people who have spent their whole careers in the refinery. It’s not just a workplace, it’s a culture,” said Ryan O'Callaghan, president of the local United Steelworkers union and an operator at the refinery.

Many had been through the plant's ups and downs, from good years earlier this decade to a bankruptcy process last year, but the fire has left them jobless in a region that only employs about 2,000 workers in the refining industry.

“These jobs are hard to duplicate. It’s not like there are a lot of refineries around here anymore, so it’s going to be a challenge,” said Steve Bussone, 54, a union lab technician with 23 years at the refinery.

He was hoping to retire in about ten years, but the closure may delay those plans. He was not preparing to start over at his age and said the potential lack of a severance package makes the whole process that more daunting.

The June 21 fire started in a butane vat, and was followed by a series of explosions that ripped through the 335,000 barrel-per-day plant, the oldest on the East Coast, which destroyed at least one key unit and threw fragments onto nearby highways.

Just four days later, Chief Executive Mark Smith said the plant would close indefinitely. The company is planning a sale, but that process, and a subsequent reopening, is not likely to happen for years, if at all.

"We cannot commit that (a restart) will occur," Smith said in a letter to the union. "As such, all layoffs are expected to be permanent."

For some, Wednesday's official announcement was a confirmation of what they knew was inevitable after the massive fire.

The plant banked big profits in 2013 and 2014 as it used trains to bring crude oil in from the burgeoning shale business in North Dakota. However, after a 40-year-ban on crude oil exports was ended in 2015, oil drillers found it more profitable to ship crude to U.S. Gulf-area refiners by pipeline and to export destinations.

Since then, the refinery has struggled, even after reducing its credit obligations through a 2018 bankruptcy process and having slashed worker benefits and pensions. Its cash balance had dwindled by 40% to $87.7 million in just three months, leaving it in a precarious position before the fire.

Still, the decision came as a bitter blow, as previous owner Carlyle Group (O:CG) paid itself out nearly $600 million in dividend-style distributions, many taken through loans against the plant's assets, since taking over the refinery in 2012.

Rich Francis, 28, a gasoline trader at the company, was one of the 150 or so non-union employees fired on Wednesday as the company seeks to shut the refinery.

Like the others, Francis got no severance package and his family’s health benefits run out at the end of July - which will hit hard, as his wife recently had a kidney transplant that requires expensive medication daily.

“They have given me so little runway here. It’s real disappointing in how the company handled this,” Francis said.

The United Steelworkers president said the union is expecting to negotiate severance packages and benefits for union members - but also pushing to rebuild the unit so the refinery can keep running.

“That’s what we’re fighting for,” said O'Callaghan, who started with PES in 2007. “The entire refinery runs without all units on all the time.”

Philadelphia refinery workers plan for uncertain future after jobs go up in smoke
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email