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£5.6m RMI pension gap

The RMI is planning redundancies and other cost-saving measures as it negotiates with the trustees of its pension fund over a £5.6m shortfall. A £4.4m deficit was shown in the 2003 results.

Matthew Carrington, chief executive, says: “We face a similar problem to many companies with pensions based on final salaries and hope the trustees will accept our offer of £600,000 a year for the next decade.

“That is well within our capabilities, as we are a non profit-making £30m turnover company with £4m cash reserves, no debts and a 999-year lease on our London headquarters.”

RMI staff were briefed on coming redundancies last week. Carrington hopes job losses will be restricted to 15 to 20 (around 5% of the 350 employees).

Tackling the pension fund shortfall is seen by RMI directors as an important part of the current overall review of activities. “The collapse of MG Rover, and the financial impact on its dealers, has helped us to focus on the need for the RMI to have the right structure to cope with these shocks,” says Carrington.

Another challenge is the threat of a so-called super complaint about the motor industry by the National Consumer Council to the Office of Fair Trading. The RMI and SMMT have given evidence.

Carrington hopes the OFT will approve the RMI’s code of practice, and says there is no question of resurrecting CarWise. He also denies industry speculation that the RMI could be broken up after the policy review.

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