Pirelli UK Alters Pay Arrangements?

Managers at Pirelli’s Carlisle facility have reportedly told unions that they want to keep workers’ annual pay increase below the rate of inflation. Pirelli’s Wolfgang Meier, who replaces previous UK industrial director John Nixon, is said to have argued that workers must accept lower pay rises to keep the site competitive. He also suggested that some manufacturing functions would have to be outsourced. However, Pirelli representatives downplayed The News & Star coverage, saying that Meier’s comments were taken out of context.

The News & Star quoted Wolfgang Meier as saying: “There might be a time when we have to make sacrifices, that we accept lower pay increases than the retail price index…We have to make Carlisle interesting for Pirelli as a production location and that means reducing the cost gap with other centres.” Meier did not suggest that there would be any job losses, and did not put a definite timetable on any of the suggestions.

Despite the fact that Pirelli’s Carlisle factory exports 80 per cent of its output, Meier told the local press that the plant faces stiff competition from other Pirelli sites, particularly in Turkey and Romania, where costs are lower. “We have to build on our strengths and eliminate our weaknesses. We are at the furthest north point that you could be to send tyres into key markets in Europe. We have additional transport costs. The absenteeism rate is also an issue. If we want to be more profitable, we have to improve our productivity by being a more effective workforce,” the Cumberland news reported.

Pirelli UK human resources director since 2003, German-born Wolfgang Meir officially began work as industrial director on 1 January 2006.