Workers at the Krupps Camford Pressings plant in Llanelli voted to cut overtime rates after they were told the plant may close.

The German-owned company says it will invest £7m in the factory which will lead to the creation of 45 new jobs.

Workers had been threatened with redundancy unless they agreed to accept a pay cut of up to 20%.

Geoff Jacob of the Transport and General Workers union, says staff agreed new overtime rates and a starter rate for new workers.

Secret ballot

Mr Jacob says the settlement was approved by a secret ballot in which the voting went roughly 350 in favour, 250 against. The result has now been accepted by management, he said.

Officials from the TGWU held talks with management at the factory last month.

They accepted that the factory was in serious economic difficulty after the loss of important contracts, notably Rover.

The negotiations centred on how the new financial constraints could be dealt with. Job losses were thought to be unlikely.

Ultimatum

Union officials were called in after workers were given the ultimatum: "take a pay cut or lose your jobs."

The meeting was seen as crucial for the future of workers at the plant which supplies components to the car industry.

Llanelli Assembly Member Helen Mary Jones backed the workers and met with managers of the plant.

The area has seen a large number of job losses this year.