Workers at Jaguar Land Rover yesterday voted overwhelmingly to back proposals to help retain jobs amid the current recession that has dried up its car sales in the UK and Europe.
The workers employed at JLR's Gaydon, Whitley, Castle Bromwich, Halewood, Solihull and Browns Lane sites voted by 70 per cent to back proposals recommended by their unions, Unite and the GMB, which would see the working week reduced to four days and pay frozen for one year in order to ensure continued production and avoid compulsory redundancies.
The deal that the workers voted for includes a pay freeze for one year in lieu of avoiding compulsory redundancies in the non-management workforce in the UK over the next two years.
All the workers also opted for the four-day week at the plants, a 40-hour working week for salaried employees with no increase in pay with workers being able to interchange work across the Jaguar Land Rover West Midlands sites. The 2,400 salaried employees will forego the planned bonus this year.
The union leaders and the company were forced to arrive at an understanding in order to save jobs as the company had already axed around 1,800 agency, production and management jobs in recent months as well as where the company proposes to save around £70 million in costs.
In a joint statement following the ballot result, the unions said, "We did not want our members in JLR to be faced with the same fate as the thousands of others who have been dismissed in other companies. Our members in JLR deserve better - much better. The management agreed with our view that, when this unprecedented recession ends, that the retention of a skilled and loyal workforce is an integral part to the ongoing success of this business.
"The union and our members were faced with a difficult choice, but no less difficult than the choices we have had to make in recent times. When the business was sold to Tata we faced up to that challenge together and delivered the best possible agreement which safeguarded our plants and our members' jobs. We did not work hard for that to see wholesale redundancies less than 12 months later.
"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.
The cash-strapped JLR, bought out by Tata Motors in 2008 from Ford before the onset of the rapid economic slowdown, received an unexpected boost late last month, when a Chinese trade delegation to Europe signed a life-saving deal worth £600 million to purchase 13,000 vehicles from JLR over a period of three years. (See: China bails out JLR with £600-million order)
The important deal comes at a time when the entire UK car industry, especially luxury car maker JLR has been lowering production and introducing redundancies in response to the sharp decline in car sales due to the drying up of bank loans.
Meanwhile the rating agency, Moody's Investors Service lowered Tata Motors credit rating by two steps from B1 to B3, six levels below the investment grade.
Tata Motors has to refinance $2-billion it borrowed to buy Jaguar and Land Rover from Ford Motor last year and Moody's said in a statement that the outlook is negative for the near term.