Workers at Tata's Jaguar plant to vote on pay freeze deal

S Kalyana Ramanathan / London February 25, 2009, 0:48 IST

Around 12,000 workers in Tata Motors-owned Jaguar Land Rover (JLR) are set to vote on an agreement for a year-long pay freeze and also a four-day week, to avoid job cuts for the next two years. Should the management and unions agree on this new deal, it will be be then decided by ballot count early next week. If it comes through, the UK car maker will save up to £70 million (Rs 500 crore) annually in costs.

Joe Morgan, regional secretary of the GMB (the labour union), commenting on the JLR proposal, said “GMB members are deciding this week. GMB will support them in whatever decision they make.”

However, an ongoing plan to remove 450 jobs (300 managers and 150 agency or contract wokers) at JLR, part of the original plan to cut 2000 jobs, will be implemented, said a company spokesperson. Adding: “(It is) also important to underline that the agreement would relate to there being no compulsory redundancies over two years. We have so far only had voluntary redundancies in previous programmes.”

In calendar 2008, Land Rover had witnessed a 17 per cent fall in sales, while Jaguar improved its sales by 8 per cent during the same period, says the group's representative in the UK.

JLR’s woes are not an isolated case in the UK automobile market. Nissan and Honda have also announced job or production cuts due to the falling demand for cars globally. Early last month, Nissan had announced shedding of 1,200 jobs in the UK, while Honda had announced, this month, the closing of its Swindon plant for four months, through May 2009. Honda however has not announced any job cuts in its UK plants so far.

Car production in the UK continues to fall. In January, according to the industry body, SMMT, car production fell by 58.7 per cent, to 61404 units, while production of commercial vehicles fell by nearly 60 per cent, to 8351 units.

In January, the UK government announced plans to help the industry, including guarantees to provide loans of up to £1.3billion (Rs 9,500 crore) from the European Investment Bank, as well as a further £1bn (Rs 7,250 crore) in UK government loans, to fund investment in environment friendly vehicles.