On the go: General Electric’s UK division is facing the prospect of industrial action over reforms to its pension schemes, which, critics have said, will leave workers thousands of pounds worse off.
The multinational conglomerate announced in January proposals to freeze the accrual of benefits for some 2,800 workers across its UK businesses.
All current members of the GE Pension Plan, which has been closed to new entrants since 2011, and the GEAPS defined benefit schemes, are to be enrolled into the company’s existing defined contribution scheme from January 2022.
The company also proposed a temporary increase to the default 10-percent employer contribution by 2 percent for the first two years, though there will be no change for GE retirees already collecting pension benefits, and no change to existing benefits accrued by active members until December 31, 2021.
The move was part of the latest cost-cutting bid at the company, which has previously frozen the pensions of around 20,000 employees in the US. Its UK pension obligations stood at around $14bn (£9.9bn) as of 2020.
The proposals were put to its workers in a 60-day consultation in January. GE chief human resources officer Kevin Cox said then that the proposals were difficult but necessary, “as we continue our work to accelerate GE’s transformation”.
“We are actively managing GE’s pension obligation by considering market trends and employee impact while thoughtfully balancing our company priority to solidify our financial position.”
The union Unite said at the time that the change constituted a “financial torpedo” for employees, criticising the what it called the “salami slicing” of pensions in light of a $47m bonus secured by GE’s US chief executive Larry Culp.
On Monday, the union stepped up its criticism, announcing that a strike ballot was “on the cards” in response to what it called a “savage kick in the teeth” for its members.
The union cited “a rising tide of anger” among its membership, and strike action could hit GE sites in Cardiff, Cheltenham, GE Caledonian (Prestwick) and Rugby, as well as Dowty Propellers in Gloucestershire. There are also Unite members who are service engineers with a national remit.
Though precise figures will vary depending on individual circumstances, the union said some members could see cuts to their retirement income of as much as £11,000 if the changes are allowed to go ahead.
In a letter to Kevin O’Neill, chief executive of GE UK and Ireland, Unite national officer Linda McCulloch criticised the company for protecting the pensions of its top executives while attacking the pensions of the wider workforce.
McCulloch wrote: “The handling of this situation from the GE management side has been utterly abysmal, and the blatant refusal to engage in a proper negotiation with Unite officials is nothing other than a display of arrogance and contempt for the thousands of Unite members that work in GE.”
“It really is no wonder that there is such a degree of anger amongst the workforce and such a low level of morale. This will doubtless display itself in a high level of attrition in the future,” she said.
She accused the company of using the Covid-19 crisis as an excuse to “attack employees’ pensions”, which she called “shameful behaviour” in light of the company’s “extremely healthy financial situation”.
A GE spokesperson said: “The proposed changes to our UK defined benefit pension offerings are difficult but necessary as we continue to accelerate GE’s transformation and solidify our financial position while more closely aligning with current industry standards. We have completed a thorough 60-day consultation with plan members and are considering all questions and feedback.”
