Thursday, November 30, 2006

by Victor Epstein

USA (Bloomberg), HOUSTON: Valero Energy Corp., the largest US oil refiner, said refinery workers at its Aruba refinery went on strike Tuesday in a dispute over wages, benefits and bonuses.

The union represents 328 of the 710 workers at the plant, Mary Rose Brown, spokeswoman for the San Antonio-based company, said on Wednesday in an e-mailed statement. Production hasn't been affected at the refinery, which has a daily capacity of 275,000 barrels, she said.

United Steelworkers spokesman James Jeffries said energy industry strikes are being precipitated by the unwillingness of the company to share increased profits with workers. Valero's third-quarter earnings jumped 86 percent to $1.6 billion from a year earlier after production increased and profit margins at the company's filling stations more than doubled.

"Valero Energy is making significant profits from its Aruba refinery and workers believe it's appropriate for them to share in that wealth," Jeffries said. "The company's last offer, which the Union Local 1961 received about 7 pm Aruba time November 27, was insufficient."

Brown said Valero's five-year contract offer represented a 47 percent increase in salary and benefits and would have expanded workers' vacation and pension benefits.

Jeffries said the offer didn't address worker concerns about modifications to existing bonus programs, such as the company's desire to tie Christmas bonuses to performance.

The strike comes about 10 weeks after the Independent Oil Workers Union of Aruba entered into a strategic alliance with the United Steelworkers international union and began negotiating with Valero on a new collective bargaining agreement. The two labour groups have since merged, according to Lynne Baker, a spokeswoman for United Steelworkers.

"As for our operations, it's business as usual at the refinery," Valero's Brown said. "About 15 percent of the represented employees returned to work today and we've heard from many others who want to return. So we believe that we'll be able to resolve this issue in the short term."

Richard Marcogliese, executive vice president of Valero, said on September 6 that the company was looking to Europe for growth now that acquisitions have become prohibitively expensive in the US. The Aruba plant will play a key role in that strategy because its products can be sold in either Europe or the US, depending upon which market is the most profitable, he said.

  Most popular articles: viewed, printed and e-mailed

  Printable version