PHILADELPHIA – After intensive negotiations initiated by the Steelworkers, Monroe Energy LLC, a subsidiary of Delta Airlines, agreed on May 1 to buy one of the three big petroleum product refineries in the Philadelphia area, keeping the Trainer, Pa., facility open and saving an estimated 5,000 jobs.
The purchase price for the plant, from ConocoPhillips, was not disclosed, but Delta also agreed to pump $100 million more into it for infrastructure improvements, said USW President Leo Gerard and Vice President Gary Beevers, who heads the union’s sector that represents oil workers.
The Trainer, Pa., plant was the last remaining large refinery open in the Philadelphia area. Two others, one each owned by Sunoco and ConocoPhillips, had been shut, throwing workers out of jobs and setting up potential shortages of jet fuel, gasoline, and home heating oil in the Mid-Atlantic and New England states. Federal studies warned the shortages could lead to price hikes, due to inadequate supply.
Closure of the first two plants and the threatened closure of Trainer, with the migration of well-paying middle-class jobs, led to a months-long public campaign by the Steelworkers to put pressure on the companies to find buyers for the refineries. The unionists also lobbied Congress and the Obama administration to step in to prevent the fuel shortages. Lawmakers, citing national security grounds, held hearings. The Philly refineries supply fuel for nearby Air Force bases in New Jersey and northwards.
That’s what led Monroe into the deal. It’s buying Trainer to insure it has a plant that can refine a plentiful supply of jet fuel for Delta’s planes. The carrier’s fleet and route map greatly expanded in the last two years, after it gobbled up Northwest Airlines.
Beevers called the Trainer plant purchase “a bold step by Delta to address increasing fuel costs by stepping up and forming a company.” Steelworkers spokesman Wayne Ranick emailed that Delta’s “bold adventure” is “one the airline is looking at to provide them with significant cost-savings when it comes to fuel.”
Both Gerard and Beevers praised Delta’s move. “Retaining these good paying jobs was vital to the community,” Gerard said. “State government, the local union, and the companies all worked together to make this happen.
“Our local leadership did a great job telling the public of this facility’s importance. Gov. Tom Corbett made state assistance available and the buyers committed to investing $100 million beyond the purchase price for infrastructure improvements.”
Beevers called the process of finding a buyer for the plant – ConocoPhillips had threatened to close it by July if nobody came forward — “gut-wrenching, but the 5,000 jobs saved made it all worthwhile.”
“We’re very happy for this transaction and look forward to working with Monroe Energy’s management,” said USW Local President Denis Stephano. “We’re a first-class work force and this is a high-quality facility. We only regret Marcus Hook was not part of the transaction.” Marcus Hook was the closed ConocoPhillips plant.
Delta has a track record, with the Association of Flight Attendants-CWA, of extreme anti-unionism, but USW’s Ranick said Delta lets Monroe management operate independently. USW is “already in bargaining with Monroe, and we’ll soon have some-thing to take to the members” of the Trainer plant’s local. “We have history with the new plant manager as he has managed facilities with USW contracts,” Ranick added.