Strike called over pension changes

Many workers have had their pension rights cut

Hundreds of workers at two French-owned chemical factories have voted for industrial action over the closure of their final salary pension scheme to new members.

Should the strikes go ahead, the closures would disrupt production at Rhodia's Oldbury and Widnes plants for about 36 hours each time, the company said.

The action would be the first large-scale strike action over the closure of final salary schemes to new members.

Union sources, however, said the strike action could potentially have more severe repercussions for production - and could close the two plants for nine days.

Angry workers

The unions say their members are also angry at cuts to employer contributions.

Kevin Curran, GMB General Secretary said: "Our members at Rhodia have delivered a clear message to the company opposing any threat to the final salary scheme and we hope that the company will take that message seriously and withdraw their pension cutting plans."

If the strikes go ahead, they are expected to take place within the next two months, but it is not clear how frequently they would be held.

According to Rhodia's last published estimate, the firm has a pension deficit of £80m.

Rising pension costs

Under final salary pension schemes, staff get a set proportion of their final wage when they retire related to how long they have worked for the firm.

But falling stock market returns, higher running costs and a range of other factors such as longer life expectancy are increasingly making these schemes less viable, and many of them have been closed in recent years.

Instead many firms are switching to defined contribution or money purchase schemes, which do not guarantee the final pension sum and are therefore less risky for companies.

Previous industrial action over pensions has had some success.

Steelworkers at Caparo won back their final pension salary scheme in September 2002, after protesting over its closure to all members.

Roger Lyons, Joint General Secretary of Amicus, said: "The willingness to take action by Rhodia employees is the first rumblings of the groundswell of public opinion which will drown us all in old age unless we deal with the pension crises today."

The company is to meet on Tuesday to discuss the result of the vote.

Ballots at four other plants were not successful, the company said.

Bob Tyler, UK human resources director at Rhodia, said he could not comment in advance of the meeting, but said: "We hope to resolve something. We don't want any industrial action."