Staff at Jaguar Land Rover have agreed to take a pay freeze and work a four-day week in order to avoid redundancies as the motoring industry continues to be hit by falling car sales.
The news follows data from the Society of Motor Manufacturers and Traders (SMMT) released yesterday that revealed new car registrations had fallen 21.9% last month compared with February 2008, which has forced many firms to cut employment costs.
Workers at Jaguar Land Rover’s manufacturing operations in Castle Bromwich and Halewood will switch to a four-day week, while all 15,000 staff have accepted a pay freeze until 2010 in exchange for the company’s agreement that there will not be any compulsory redundancies among non-management employees for two years.
Other elements of the agreed package include workers who are paid on a monthly basis accepting a three-hour increase to their working week to 40 hours with no increase in pay, non-payment of a bonus for 2,400 employees planned for 2009, and an increase in employee pension contributions.
The measures are expected to achieve savings of around £68million.
David Smith, chief executive officer at Jaguar Land Rover, said: “This is an important step for us as a standalone business. It also confirms our determination as a team to steer Jaguar Land Rover through these extraordinary and challenging times, so that our business is ready to take advantage when the downturn finally ends. I am also pleased that the company and trade unions have been able to work together so constructively when dealing with such sensitive issues.”
Bert Hill, organiser at union GMB, said: “The choice for our members was clear – further mass redundancies or what is undoubtedly some short-term pain in order to secure the future for our members and their families.”
Meanwhile, British Airways has warned staff that a pay freeze could be implemented this year in order to cut employment costs. Talks with trade unions are currently ongoing.