Toyota has already followed other carmakers in cutting temporary jobs
Carmaker Toyota says that staff at its UK factories will have their pay and working hours cut by 10%.
The cuts will take effect on 1 April and will last for one year. They affect 4,500 staff at plants in Burnaston, Derby, and Deeside, Flintshire.
Toyota said the measures would allow the company to "maintain employment in this difficult period".
Car firms in the UK and elsewhere are cutting jobs and slashing production as the downturn hits car sales.
The Unite union said that the cuts announced by Toyota would give their workers a measure of stability, although it said any decision to cut wages and working should not be taken lightly.
UK CAR INDUSTRY CUTS
1: Aston Martin
(Gaydon) 600 jobs lost, three-day week
(Crewe) Three-day week introduced. 220 jobs lost, seven-week closure from March
(Essex, Daventry, Merseyside, Bridgend & Southampton) 850 jobs lost, four-day weeks, non-production days
4: GM Vauxhall
(Ellesmere Port & Luton) Extended Christmas closure. 40-day shutdown
(Swindon) Production halted until June
6: Jaguar Land Rover
(Solihull & Halewood) 1,050 jobs lost plus production cuts. One year pay freeze and four-day week.
7: BMW Mini
(Swindon & Cowley) 850 jobs lost. Two-week shutdown planned for August
(Sunderland) 1,200 jobs lost, some shifts stopped
(West Sussex) 40 jobs lost plus non-production days
(Burnaston & Deeside) Two-week shutdown. Pay and working hours cut by 10%
(Birmingham) 95 jobs lost, production suspended since December
Source: SMMT & BBC
"The agreement we have reached with Toyota will ensure none of our members' benefits are eroded and that these skilled workers will remain in place and at work ready for when the upturn comes," said Unite representative Peter Tsouvallaris.
Carmakers have been forced to announce cost-cutting measures, including reducing production, freezing pay and stockpiling thousands of vehicles, in the face of a sales slump across Europe.
More than 3,000 UK redundancies have been announced in recent months, with parts suppliers also hit hard.
Toyota employs 3,900 workers at Burnaston, where the Avensis and Auris are made, and 570 at Deeside.
Toyota has already suspended a night shift on its Auris production line and will shut production for a total of four weeks in 2009.
It has already cut 200 temporary jobs and opened a voluntary redundancy scheme last week but has insisted big layoffs would not be necessary.
"We have in no region in the world, in no manufacturing plant, made any large scale forced redundancies," Graham Smith, senior vice president, Toyota Motor Europe told BBC News in a recent interview, insisting that the company is fiercely protective of its skilled workforce.
"That has tremendous value for a company like Toyota," he added. "We have to be ready when the upturn comes."
Toyota has already said it will post the first group-wide annual operating loss - totalling more than £3bn - in its 70-year history.
The company has scrapped annual pay increases and management bonuses.
The Toyota cuts came as motor industry representatives met in London to discuss a £2.3bn support package.
Carmakers and suppliers have yet to receive any funds from the Automotive Assistance Programme, which was announced in January.
The Department for Business, Enterprise and Regulatory Reform said about 30 car manufacturers and suppliers had made an initial approach for support, but full applications had yet to be made.
The support, funded by the government and the European Commission, is linked to helping firms become greener, more innovative and more productive.
The government also announced that Jaguar Land Rover would receive a £27m grant to develop a new vehicle under a separate scheme.