Page last updated at 14:42 GMT, Friday, 15 May 2009 15:42 UK

Honda plant staff vote on pay cut

By Martin Shankleman
BBC employment correspondent

Honda production line
Staff were told the pay cut would be a temporary measure

Workers at Honda's Swindon plant are being asked to vote in favour of a plan to sacrifice pay to safeguard 490 jobs.

Under the deal, employees will take a 3% cut in earnings and managers will suffer a bigger hit of 5%.

The move comes after the plant shut down for four months. The Unite union recommends members accept the deal.

Honda agreed the deal with union negotiators and its employee council and Unite said it set an industry benchmark for protecting jobs.

In return for agreeing to the cut, workers will receive a bonus of six additional days of paid leave, Unite said. The pay cut would be for 10 months.

It said that ballot papers had been sent to union members on Friday and the results are due by the end of next week.

'Industry benchmark'

In the longer term, Honda believes the 490 employees will be needed, as production of a new model, the Jazz, gets underway following the shutdown.

Prototype models of the new car will start to be assembled next month, with mass production starting in October.

"It's the Honda philosophy in action, trying every which way to maintain production and avoid making people redundant," said Paul Ormond, Honda's UK spokesman.

"We've always been open and honest with associates [workers], and this has paid off - there's an element of trust."

Honda retained employees on basic pay during the shutdown, a move that should should be commended, according to Jim D'Avila, regional officer of Unite.

"The workers have been paid during this period and will pay the company back by working extra hours once they return to work," Mr D'Avila said.

"This agreement sets an industry benchmark for protecting jobs during this recession."

Honda has been forced to make redundancies, but these have all been achieved through voluntary means.

Some 1,400 workers have left the company in recent months as part of a voluntary release scheme, reducing the headcount from 4,800 to 3,400.

"Respect for individuals is very much at the core of Honda, and redundancy is very much a last resort," said Mr Ormond.

The company is optimistic the pay-cut plan will be agreed by union members. The employee council has already backed the cuts.

"They've taken the action that will secure the long term future of the plant," said Mr Ormond.

"It's a different approach to one or two other companies that we've seen," he added.

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