BP Oil to shut Marcus Hook refinery as dispute lingers 'It's a disaster for the area'


PHILADELPHIA -- BP Oil Co. said yesterday that it will shut down its Marcus Hook, Pa., refinery this month in the wake of a breakdown in talks between unionized workers and the company that has agreed to buy the refinery.

Most of the 535 people who work at the sprawling plant will lose their jobs. A shutdown also would have a widespread impact on the thousands of contract laborers and vendors who work at the plant each year, in addition to the maritime industry that moves petroleum shipments up the Delaware River.

"It's a disaster for the area if this happens," said James Martin, executive director of the Philadelphia Area Labor Management Committee, a group that tries to improve labor-management relations. "There's a vitality around this kind of manufacturer that's hard to measure."

It is uncertain whether the new owner, Tosco Corp. of Stamford, Conn., would restart the refinery or use the property in a substantially reduced capacity, such as a tank farm for storing petroleum. Currently, the facility refines 190,000 barrels a day, or about 8 million gallons of fuel, enough to fill the tanks of about 600,000 Ford Escorts each day.

Tosco yesterday asked BP to turn the refinery over on Feb. 1 in a "non-operating configuration" after the union canceled a vote on Tosco's proposal, which calls for work force reductions and contract concessions.

Local 8-234 of the Oil, Chemical and Atomic Workers Union canceled the vote after detailing the package to members on New Year's Eve. "You realized the package presented to you wasn't worth the time and effort to vote on it," the union's leaders told the membership in a recorded message yesterday. Local President Denis J. Stephano could not be reached for comment.

Thomas D. O'Malley, Tosco's chief executive, wrote to BP employees yesterday to express regrets that the refinery would be closed. "This afternoon, Tosco advised the local union and the international union that we do not intend to hire a work force and see no reason to continue discussions," Mr. O'Malley said.

Tosco went into the negotiations with a strong bargaining position. If it took over an idled refinery, it could rehire workers under more favorable conditions -- if it elects to restart the refinery at all.

Tosco told BP employees that it could run the Marcus Hook refinery profitably only by reducing its volume by 20 percent and cutting 135 of its 535 employees.

The cuts would be equally distributed among unionized and nonunion employees, the new owner said.

Tosco also wanted to be able to hire its work force without regard to seniority, a demand the union rejected.

Tosco said it was not able to formally present its proposals because the union "adamantly refused to accept the package at every meeting" until last Friday.

The company said it wanted a response from the union by Dec. 31, and said it got its answer when the union canceled the vote scheduled yesterday.

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