Britain’s largest union, Unite announced today (Friday 3 March) that it would be balloting members who make the iconic Mini and Rolls-Royce motor cars for BMW after the carmaker refused to lift its threat to close the final salary pension scheme by 31 May 2017, while talks continue.
The German carmakers’ refusal comes ahead of crunch talks involving Unite general secretary, Len McCluskey, senior Unite shop stewards and senior BMW managers on Monday 6 and Tuesday 7 March.
An earlier high level meeting on 20 February at BMW’s Cowley plant saw the union lay out its opposition to the pension plans, which could result in some car workers losing as much as £160,000 over the course of their retirement (see notes).
Anger has been mounting among BMW’s UK workforce over the proposed pension scheme closure which comes amid record breaking profits of approximately £6 billion for the carmaker, enabling it to lavish nearly £2 billion of dividends on shareholders.
Voting is expected to begin from next Friday (10 March) when ballot papers start arriving through members’ letterboxes and finish on 31 March. The strike vote involves approximately 4,500 workers who are members of the BMW occupational pension scheme working at Cowley, Goodwood, Hams Hall in the West Midlands and Swindon.
Commenting Unite general secretary Len McCluskey said: “Unite requested that BMW lift its deadline for the pension scheme’s threatened closure so that talks could be conducted in a meaningful way. Unfortunately that perfectly reasonable request has been refused by BMW bosses, who are in danger of miscalculating the growing anger among its UK workforce.
“BMW’s UK workforce is world class making over 260,000 Minis and record numbers of Rolls Royce motor cars in the last year. Their hard work and efficiency has contributed hugely to BMW’s record breaking profits, yet now they face losing tens of thousands of pounds in retirement income.
“BMW bosses would do well to heed the growing sense of betrayal over their broken pension promises, which have already seen 96 per cent of workers saying they would take industrial action in a consultative ballot.
“Unite will be entering talks in a positive manner. We would urge BMW to do likewise and engage meaningfully with Unite in finding a solution that safeguards car workers’ pensions and works well for the business.”
For further information please contact Unite head of media and campaigns Alex Flynn on 020 3371 2066 or 07967 665869.
Notes to editors:
- Unite is Britain and Ireland’s largest trade union with over 1.4 million members working across all sectors of the economy. The general secretary is Len McCluskey.
BMW’s plans to close its final salary scheme called the BMW occupational pensions scheme could see workers lose up to £160,000 in retirement income as these illustrations show:
Barry is in his 50s
Barry is aged 56 and has 23 years past service in the scheme. His current pensionable pay is £38,200. If Barry carries on in the scheme until he is 65 he might expect to receive a pension of £20,180 per annum.
But if the company gets its way and slashes his pension, Barry is looking at losing £4,000 per annum because his past service benefit would reduce in value by 5 per cent and his future service benefit by over half. If Barry takes maximum tax free cash then he would be left with a pension which was £2,900 per annum lower, meaning a potential loss of £70,000 over his retirement.
Mike is in his 40s
Mike is aged 44 and has 14 years past service in the scheme. His current pensionable pay is £39,300. If Mike carries on in the scheme until he is 65 he might expect to receive a pension of £23,940 per annum.
Mike is looking at his pension being slashed by £7,500 per annum if the company closes the defined benefit pension scheme. His past service benefit would reduce in value by 10 per cent and his future service benefit by just under half. If Mike were to take maximum tax free cash then he would be left with a pension which was £5,900 per annum lower, meaning a massive loss of £140,000 over his retirement.
Wade is in 30s
Wade is aged 33 and has 13 years past service in the scheme. His current pensionable pay is £38,000. If Wade carries on in the scheme until he is 65 he could look forward to a pension of £31,400 per annum.
Wade is facing a massive 30 per cent cut in his pension if BMW closes the scheme because his past service benefits would reduce by 15 per cent and his future service benefits by 40 per cent. Wade is looking at losing a whopping £160,000 over his retirement if he were to take maximum tax-free cash and be left with a pension which was £6,600 per annum lower.