Philadelphia Energy Solutions notified the Steelworkers Union on Tuesday that most of the unionized workforce would be let go immediately at the bankrupt South Philadelphia refining complex, which shut down following a devastating June 21 fire.
Most of the union members currently working at the complex, the largest refinery on the East Coast, were to be released Tuesday afternoon, said Ryan O’Callaghan, president of Steelworkers Local 10-1. He said he expected the 12-hour shifts scheduled to work Tuesday night and Wednesday to be called in early and “processed.”
“The company’s word is process,” said O’Callaghan. “They process you out. Ridiculous word.”
Only a few operators of the refinery’s boiler house, which produces steam for the plant, and the site’s wastewater treatment plant will remain at work. “The boiler house and wastewater treatment plant are still running and they need people there, and they have told me our operators will stay there until they figure out what they’re doing,” O’Callaghan said Tuesday.
PES said Tuesday that the refinery is shut down and that it has taken measures to preserve the facility for sale and restart.
“The refining complex has completed the idling of a majority of the equipment," Mark Smith, the refinery’s chief executive, said in a statement. "We are releasing employees this week in accordance with previous announcements. PES will maintain a caretaker staff at the facility to complete a number of ongoing projects and ensure the safe and environmentally compliant operations at the refinery site.”
“We realize this is a very difficult situation for our employees, their families, the community, and the city of Philadelphia," Smith said. "We thank our employees for their many years of dedication and service and are grateful for the support from city, state, and federal agencies through this challenging transition.”
Before the June 21 fire, PES employed 1,100 people directly — it had a $100 million annual payroll — and hired contractors that employed hundreds of other specialized workers. A few days after the fire, the company announced it would close and put itself up for sale. In July, it filed for bankruptcy for the second time in two years.
Employees will be paid through the end of this week, until Aug. 25, when their wages and benefits end. They will receive no severance pay.
“People are frustrated," said O’Callaghan. "It’s definitely a sad day in that refinery because a whole culture is getting wiped out — it’s not just a job. We spent a whole lot of hours in there, and people really get to know each other. Some people get to know each other better than their spouses: You eat breakfast, you eat dinner, you eat lunch together. So it’s a sad day.”
The notification to O’Callaghan came a day after he appeared on a panel of labor and political leaders who called for the safe, secure closure of refinery and its quick sale to a new operator.
A panel of elected leaders, including U.S. Reps. Brian Fitzpatrick, a Republican, and Dwight Evans, a Democrat, called for a smooth transition ahead of the last scheduled day for most of the workforce. After Sunday, a “caretaker” staff will be in place to keep the refinery stabilized until its fate can be determined.
O’Callaghan said he expects that some union workers will be called back to work because he said the refinery’s complex equipment needs experience hands. The plant’s operators undergo three-year apprenticeships before they become certified.
“I anticipate they’ll be calling our people back because they cannot maintain the refinery in a caretaker role without our people,” he said. “They can’t do it safely, at least.”
About 80 employees were told last week that they were no longer needed, though they would be paid through Aug. 25 in order to comply with a legal 60-day layoff notice requirement. O’Callaghan says the union is still negotiating with management over whether workers will remain employed after Aug. 25 to work as caretakers.
The refinery operations are virtually shut down, and the plant, under the supervision of state and federal regulators, last week began neutralizing 30,000 gallons of hydrofluoric acid used in the refining process that are still stored on the site. Philadelphia Fire Commissioner Adam Thiel on Friday said about half of the acid had been neutralized.
Federal investigators are still examining the June 21 fire and explosion, and the refinery is awaiting a resolution of $1.2 billion in insurance claims for physical damage and loss of business. But until there is a settlement, its cash reserves remain tight, and its expenses are closely monitored by rival stakeholders in the bankruptcy process.
The city’s 26-member PES Refinery Advisory Group on Tuesday and Wednesday were to hold two more public meetings, at the Preparatory Charter School in Point Breeze, to gather public suggestions for the refinery’s new life. The panel draws from labor, academia, business interests, and city government, as well as environmental and community groups. The meetings are being held from 5:30 p.m. to 7:30 p.m. at the Preparatory Charter School, at 25th and McKean Streets.