BMW's U.K. Workers Set First Strike in Decades as Brexit Looms

(Bloomberg) -- BMW AG's U.K. workers called for their first strikes in more than two decades, testing their bargaining power amid mounting concerns about Brexit's fallout on the auto sector.

To protest a planned pension-scheme change, employees will stage the first of eight day-long stoppages on April 19 at production sites that make Mini cars and components in Cowley, Swindon, and Hams Hall, the Unite union said Wednesday in a statement. It would be the first industrial action at BMW's U.K. plants since the company took control of Mini-maker Rover in 1994.

“BMW's bosses need to get their heads out of the sand and recognize their pension-pinching plans will not go unchallenged,” Unite general secretary Len McCluskey said in the statement.

The strikes escalate a months-long dispute and come just as British Prime Minister Theresa May begins negotiations with the European Union over the U.K.'s exit from the bloc. Automaking jobs in the region's third-biggest vehicle producer are at risk as companies brace for new trade barriers that may increase their costs.

BMW has hinted that it may shift production of the quintessentially English Mini car to mainland Europe after Brexit, and other manufacturers including Toyota Motor Corp. and Ford Motor Co. have warned the sector will be hurt if free trade is curtailed.

Manufacturers, which rely on the free movement of cars and parts between European countries, are concerned that trade barriers resulting from Brexit will make it less attractive to run British plants. Potential tariffs, higher labor costs and a weaker pound may cause automakers to lose 2.5 billion pounds ($3.1 billion) of profits in the U.K, according to a study by Bain & Company.

“We regret the decision for a strike and remain ready for talks,” BMW spokesman Jochen Frey said. The stoppages will cause “at least some disruption” which the German carmaker hopes to make up for later in the year.

The auto producer intends to close its defined-benefit pension scheme to future contributions starting in June and shift workers to a less generous defined-contribution plan, arguing that the current arrangements make them unsustainable. The change will affect about half of BMW's U.K. workforce of 7,600.

BMW assembles Minis at the Cowley plant, and makes components at Swindon and Hams Hall. The Munich-based company exports about 2.4 billion pounds of vehicles and parts from the U.K.

No date has been set for further negotiations.

To contact the reporter on this story: Elisabeth Behrmann in Munich at ebehrmann1@bloomberg.net.

To contact the editors responsible for this story: Chris Reiter at creiter2@bloomberg.net, Dalia Fahmy