Page last updated at 14:06 GMT, Monday, 23 February 2009

Jaguar asks staff for pay freeze

Jaguar, Land Rover logos
Jaguar Land Rover has already cut output because of falling sales

Staff at Jaguar Land Rover are to vote on a one-year pay freeze and a four-day week, in return for no compulsory job losses for two years.

The deal has been agreed between the firm and union leaders, and workers are due to decide within the coming weeks.

Owned by India's Tata, the carmaker cut 450 jobs in January.

Based in Gaydon, Warwickshire, it employs about 15,000 people in Castle Bromwich, Coventry and Solihull in the West Midlands and Halewood, Merseyside.

'Severe situation'

The deal aims to help Jaguar Land Rover save up to 70m each year.

It comes as Jaguar Land Rover continues to respond to an industry-wide fall in sales, as customers both in the UK and around the world cut back on buying new cars.

Jaguar Land Rover has already held a number of temporary work suspensions, as have most of the other main carmakers.

"We have had a number of constructive meetings with the unions to reach this agreement," said a company spokesman.

"The unions recognise the severity of the situation and the need to take action to achieve further cost reductions while avoiding further redundancies."

Last month the government announced measures to support the car industry including guarantees to unlock loans of up to 1.3bn from the European Investment Bank, as well as a further 1bn in UK government loans, to fund investment in greener vehicles.

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