Representatives from the union, including its pensions committee chairman Dick Croft, met with Federal Mogul on Tuesday (July 27) for talks to try to resolve the issue. Discussions between the parties were continuing as AM went to press, although Amicus has indicated it is seeking legal advice and would take industrial action if the issue could not be resolved round the table.
Murphy fears that if the scheme is wound up, it will have dire consequences for Amicus members, whose benefits could be halved or frozen. Amicus has 45,000 members in the components industry and 35,000 in the motor vehicle sector.
Michigan, USA-based Federal Mogul was hit by compensation claims totalling £1.2bn for asbestosis in 2001, leading to it filing in the US for Chapter 11 insolvency protection. Many of the claims were from past workers at Turner & Newell in Manchester, once one of the world’s biggest producers of asbestos, which was acquired by Federal Mogul in 1997. The procedure – standard practice in the States – left members of its pension scheme fighting other creditors for their share of its assets.
Kroll, the administrators of Federal Mogul’s British division, won permission in the High Court earlier this month to block further contributions to the pension fund by its UK operations.
Spokesman Simon Freakley says the scheme is not currently subject to winding up, and Kroll will continue to hold discussions with concerned parties.
Murphy says: “Here we have a loyal UK workforce that has stayed with the company through difficult and uncertain times, and this is how they have been rewarded.”
The pensions collapse, which follows other high-profile failures, has also brought into question schemes operated by UK retail groups, with some industry commentators asking whether they have sufficient funds to cover retirement plans.
Pensions are rapidly becoming an automotive industry issue, with many organisations not even offering their staff the option of joining a company scheme.