German car giant BMW has revealed plans to shut its two final-salary pension schemes for 5,000 staff in Britain – prompting the country’s biggest trade union, Unite, to say it will fight the proposals “by whatever means possible”.

The company, which made pre-tax profits of more than €9bn (£7.8bn) in 2015, intends to close its two defined-benefit pension schemes to future contributions from June 2017, and shift workers over to its less generous defined-contribution pension scheme.

The move will affect 5,000 workers at all the company’s British bases, including Oxford, Swindon, the Rolls-Royce plant at Goodwood near Chichester in West Sussex, Hams Hall near Birmingham, and Farnborough in Hampshire.

BMW, which owns Mini and Rolls-Royce, said that the cost and risk associated with defined-benefit pension schemes “is making them increasingly unsustainable and unaffordable for both members and companies”.

However, the Unite union expressed fury at the announcement, and said its members would lose thousands of pounds a year in retirement incomes if the proposal was allowed to go ahead.


BMW Group pre-tax profits have passed €9bn (£7.8bn) for the first time. Photograph: Andrew Cowie/AFP/Getty Images

Tony Murphy, the union’s national officer for the automotive industries, said: “This is plainly unacceptable, and Unite will be fighting this proposal tooth and claw. It is becoming increasingly too easy for highly profitable multinational companies to energetically salami-slice workers’ pensions in pursuit of even greater profits.”

He added: “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, though, ironically, profits are still rising in the last two quarters.”

In March this year, the BMW group announced it had achieved its “sixth record-breaking year in succession” in 2015, posting new highs to date for sales volumes, revenues and pre-tax profits, despite a volatile market environment.

Group pre-tax profits rose for the first time above €9bn (£7.8bn). Last month, the company revealed that its second-quarter profits rose nearly 8%.

If the plans go ahead, all staff would join the company’s defined-contribution scheme, which was launched in 2014 for new employees and now has more than 2,000 members. BMW described this scheme as “market-leading”.

Instead of carrying on paying into a scheme that guarantees a level of pension benefits linked to their salary, employees will have to pay future contributions into a money-purchase scheme where the value of the pension they receive will depend largely on the stock market’s performance.

Unite called meetings on Tuesday of both the pension committees and shop stewards’ committees at four BMW sites, and a 60-day consultation period is due to begin on Thursday. The union said it was planning to hold a consultative ballot to gauge members’ views “to show the company the union intends to fight this plan by whatever means possible”.

One of the two defined-benefit schemes, known as the “old Rover scheme”, has 5,173 active members, 17,099 deferred members (those who have left the company) and 53,029 pensioners. The other scheme has 215 active members, 450 deferred members and 220 pensioners.

A spokesman for BMW said: “BMW Group has always prided itself in providing excellent pensions for its staff, and wants to act now to protect future pension provision for all its staff and to help protect the cost competitiveness of the UK as a manufacturing base. The company is now consulting with its employee representative bodies on this proposal.”



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