AEI workers to vote on industrial action
Oct 31 2007 by Peter McCusker, The Journal
WORKERS have seen their final salary pension scheme axed – shortly after being taken over by new owners.
Staff at Gateshead firm AEI Cables are now set to ballot for industrial action after rejecting a 2% pay offer.
Despite the new Indian owners leading the company’s workforce in a Hindu ceremony designed to bestow longevity and success on the Birtley factory and its staff, many workers are now concerned for their future.
The Journal revealed last week how the company, which employs 314 people at its North-East factory, had been sold for £13.3m to New Delhi-based cable maker Paramount Communications.
The new owner hinted at staff cutbacks in coming months as it aims to turn AEI into a profitable firm by the end of the next financial year, saying that it would continue to review staffing levels.
Shortly after the deal was completed the new owners terminated the company’s final salary scheme and a new scheme introduced, it has now emerged.
Staff were subsequently told their annual pay round offer was zero. This has subsequently been raised to 2%, said Jackie Woodall, senior organiser for the GMB union in South Tyneside.
But this has been rejected and the GMB, which represents 180 staff, and the plant is now conducting a ballot for industrial action which may result in an overtime ban. Ms Woodall said: “There was a lot of concern in the run up to and following the take-over. The final salary pension scheme has been deferred.
“The new pension scheme is not comparable to the old one and the members are concerned about the new scheme.
“Paramount has told the staff that it is inevitable there will be changes in the first six months.
“The staff have been told there may more jobs or there may be fewer jobs, but Paramount has given assurances they see a long term future for the site at Birtley.
“Members are obviously disappointed about the changes to the final salary pension scheme.”
Ms Woodall went on to say that the GMB is currently in the process of conducting a ballot for industrial action, which if agreed will lead to an overtime ban. The company told The Journal it did not wish to comment on internal staff matters, but went on to say that the new owners views the Birtley acquisition as a long-term investment.
Surrey-based TT Electronics sold the loss-making firm at a discount to reduce its borrowings and the deal follows the closure of its power cable division in 2005.
It was sold at around £13m less than the actual value of its assets which are estimated to be worth around £26.5m.
AEI Cables has been operating from its Birtley site since 1950 and is a supplier to many industries including power, oil, gas and defence.
Paramount is one of the largest cable manufacturers in India and exports its products to more than 20 countries.
