UK-Based BMW Employees to Strike Over Pension Closure

Union says members could lose as much as £160,000 in retirement income.

UK trade union Unite will hold a series of strikes involving up to 3,500 BMW workers starting April 19 to protest the German automaker’s plans to close their pension plan.

The union, which said some its members could lose as much as £160,000 in retirement income, announced that it will hold eight 24-hour strikes combined with an overtime ban, and work to rule. The striking workers make engines, the Mini and Rolls-Royce cars, which are owned by BMW.

“UK workers have contributed significantly to a record year in revenues and sales for the carmaker,” said Unite general secretary Len McCluskey. “They deserve better than broken pension promises and the loss of tens of thousands of pounds in retirement income.”

Unite said that 93% of its members voted in favor of strike action at the UK plants, which are located at Cowley, Goodwood, Hams Hall and Swindon.  It said the walkouts will be the first ever by BMW’s UK workforce, and that it expects production will be “significantly disrupted” by the action.

In September, BMW announced plans to shutter its two defined benefit pension plans to future contributions at the end of May 2017, and shift workers over to a defined-contribution pension plan. The move will affect 5,000 workers at all the company’s UK sites.

According to BMW’s most recent annual report, the company spent nearly €4.6 billion ($4.88 billion) in pension provisions in 2016, up from $3 billion the previous year.

“Many UK companies have significant pension fund shortfalls in their defined benefit schemes,” BMW said in a statement. “And the cost and risk associated with these schemes is making them increasingly unsustainable and unaffordable for both members and companies.”

The union was particularly outraged by the pension closure, as its announcement came as the automaker was reporting an increase in sale and profits.

“BMW is blaming both the increase in national insurance payments and the cost of future liabilities as to why the final salary pension has become unaffordable,” said Tony Murphy, Unite’s national officer for the automotive industries, “although, ironically, profits are still rising in the last two quarters.”

By Michael Katz