First strike ever looms at AA
The first strike in its 105 year history is looming at the AA.
Alistair MacLean, the National Secretary of the AA's union, the Independent Democratic Union (IDU), has told me that a strike ballot of 5000 members will be announced tomorrow, unless there is a last-minute change of heart on plans to cap benefits in two AA pension schemes.
The AA's management wants to put a ceiling on annual rises in pensionable salaries (the salaries that qualify for a pension), to raise employee contributions and also to reduce the maximum annual rise in pensions paid to 2 ½ per cent a year.
The AA is part of a conglomerate called Acromas, which also owns Saga, the travel and financial services company that sells to those over 50.
Acromas, led by Andrew Goodsell, is aiming to reduce a £190m deficit in the pension scheme.
The final-salary scheme is closed to new joiners, but Acromas believes it is being more generous than some other companies in keeping the scheme open for contributions to existing members.
The dispute will bring back memories of tensions between employees and management after the motorcar emergency breakdown service was bought by the private equity firms Permira and CVC in the summer of 2004.
The AA became the lightning rod for criticisms that private equity firms were asset strippers that load up companies with dangerous quantities of debt.
In June 2007, the AA was merged with SAGA to form Acromas. The merger yielded huge profits for CVC, Permira and for SAGA's owner, Charterhouse.
The three private equity firms retain big stakes in Acromas, which is said to have performed pretty well in the recession.
Mr MacLean said rumours were rife that Acromas was being groomed for a flotation, which could again see vast profits generated for its owners.
However I understand that Acromas will not be joining the stampede of companies that are endeavouring to be sold on the stock market over the coming three months.