Press Report : JLR workers to hold pay ballot

Michael Kavanagh, Financial Times, 24th February, 2009

Workers at Jaguar Land Rover will hold a ballot on a deal aimed at avoiding compulsory job losses for two years in exchange for a one-year pay freeze, increased pension contributions and a four-day week.

The company, which in January announced the shedding of 450 managerial and salaried staff, said on Monday it had reached an agreement with union officials representing hourly-paid workers aimed at coping with a sharp drop in demand.

Staff represented by Unite, accounting for about 8500 of the car group’s 15,000 workforce, will in effect lose an hour’s pay a week as most plants shift to a four-day week, and will be asked to pay a larger contribution towards their pensions.

Last year, the company laid off 850 agency workers and has since been seeking volunteers for redundancy from hourly-paid staff. It is aiming to save about £70m a year from the changes. “If this goes through, it will take the pressure off the need for any compulsory redundancies,” it said.

The company, bought from Ford by Tata Motors of India for $2.3bn in March last year, operates plants in Castle Bromwich, Coventry and Solihull in the West Midlands and Halewood on Merseyside.

David Smith, Chief Executive, has been at the forefront of industry leaders calling for the government to accelerate plans to provide support for the car industry and its suppliers in the face of plummeting demand.

The company has seen a recent year-on-year rise in sales of Jaguar cars compared with a year ago as a result of introducing new models, though sales of its Land Rover lines have stalled. But Mr Smith has forecast a 30 per cent fall in total sales across its brands as the recession deepens.

This month, he defended the company’s recent record at a CBI event attended by Lord Mandelson, Business Secretary. He said Jaguar Land Rover had generated £600m in profits in the 18 months ahead of the credit crunch.

He told Lord Mandelson, in the wake of last month’s announcement of a £2.5bn government lifeline to the industry, that it would be “a tragedy were the aid package not to be delivered in time to avert the industrial consequences of another quarter like this one.”

[Source: Financial Times]

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