BMW said it is fully prepared to meet the Unite union in the UK to further discuss plans to change its pension arrangements for new employees.

Unite, Britain’s biggest union, warned that it would not rule out an industrial action ballot if the company pushes ahead with its plans to close its final salary pension scheme without proper negotiations and 'copper bottom' guarantees.

BMW said new employees would join a “market-leading” defined contribution pension scheme, in line with the group’s strategy to offer similar pensions schemes to its employees worldwide.

A spokeswoman said: “This proposal will have no impact on the pensions of employees who are currently members of the scheme. Rising and volatile pension costs are having an adverse impact on the competitiveness of the group businesses in the UK which is a significant sales and production location for the company.

“We need, therefore, to ensure that the pension benefit we provide to our current and future employees is at a cost we can both afford and predict to ensure the UK remains a competitive location.”

BMW added that it has confirmed to the Unite union that the start of consultation does not mean the door has been closed on future discussions and is fully prepared for further meetings.

Currently, the group offers defined contribution schemes in around 20 countries, including Germany, the US and China. Nearly 90% of all other UK vehicle manufacturers/OEMs have already changed to DC schemes.

BMW employs around 5,000 people in the UK at four plants including Mini and Rolls-Royce assembly facilities, plus engine and pressing shops.