BMW staff stage first UK strikes over 'pensions robbery'

Series of one-day walkouts will hit production at Mini plant in Cowley and Rolls-Royce at Goodwood

BMW Mini Cooper
(Image credit: Andrew Cowie/AFP/Getty Images)

BMW's 5,400 workers in the UK are to walk out on no less than eight occasions between April and May, over what unions are calling a "pensions robbery".

Staff will begin the series of one-day walkouts, the first in the company's history in the UK, on 17 April and they will affect all BMW's UK sites, including the Mini plant at Cowley, near Oxford, and the Rolls-Royce factory at Goodwood.

At the heart of the dispute is a change on 31 May that sees two final salary pension schemes closed fully and finally, with staff being moved to a so-called defined contribution scheme that does not guarantee payouts.

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Union leaders say this will reduce eventual pension payouts by as much as £160,000 in total.

Both the changes and the threat of industrial action have been on the cards since late last year, when BMW announced the reforms to cope with a widening deficit.

It says low interest rates and gilt yields, which have diminished pension fund returns, make the final salary schemes for existing staff unaffordable over the long term.

The two pension schemes – one of which was closed to new members in 2003 and the other in 2013 – are in the red by around £850m.

However, unions are angry that the cuts come at a time when BMW is making increased profits - up by eight per cent for last year.

The Daily Telegraph says the furore could have an impact on BMW's decision over where to build its new electric Mini, with Brexit already posing a question over whether the company would be committed to the car's "spiritual home" at Cowley.

BMW faces walkout of British workers by Christmas

01 November

"BMW is facing a battle with its British workforce," says The Times, that could lead to a mass staff walkout before Christmas.

Unite, Britain's biggest trade union, has launched a "consultative ballot" of more than 5,000 staff at five sites across the country, including the Rolls-Royce Goodwood plant and Mini factories in Oxfordshire and Swindon.

If this garners widespread support the union will press on with a full strike ballot that – if supported – could "bring production to a halt" as Unite staff make up the vast majority of the workforce.

The strike ballot could "begin within the next few weeks and pave the way for industrial action by Christmas".

Union officials had pledged to fight "by any means necessary" after the German carmaker announced changes to its company pension scheme in September, says The Guardian.

BMW is closing finally and for good two defined benefit pension schemes, which pay out a set pension based on average or final salary. The firm is also moving staff to a cheaper defined contribution fund.

The two schemes have been closed to new employees since 2003 and 2013 respectively and are collectively in deficit to the tune of close to £850m, says the Daily Telegraph.

Around 5,400 employees who were already enrolled in the funds before they were closed are still actively contributing and will receive a less generous pension as a result of the changes.

Unions are particularly angry that the decision has come at a time when BMW is increasing profits by eight per cent in the second quarter of the year.

Low interest rates combined with central bank bond buying are seen as key factors in the plummeting of pension fund returns. The shortfall relating to future payouts for defined benefit funds has soared.

Increases in life expectancy have been driving costs up for a number of years.

Companies are reluctant to pay ever larger sums out of their profits, or investor dividends, to fill these growing black holes and many such schemes across the private sector are being closed.

A spokeswoman for BMW says that its defined-contribution scheme is "market-leading" and that the costs and risks associated with final-salary plans make them "increasingly unsustainable and unaffordable".

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