Unions agree deal to save Rover

MANAGEMENT AND unions are set to sign a ground-breaking deal aimed at saving Rover's Longbridge plant by delivering German levels of productivity in return for a move towards German terms and conditions for workers.

Employees' representatives are also expected to agree to around 2,500 redundancies, but on the basis that they are voluntary, that severance payments are enhanced and that job losses are staged, The Independent understands.

As part of the agreement, which could be announced today, management will commit the company to reduce the average working week from 37 hours to the 35 worked by employees at Rover's German parent company BMW. Salaries will replace hourly wages and overtime payments will be abolished.

In return, production staff will be expected to work flexibly so that they can respond to changes in demand. Working time will be calculated over 12 months and the extra hours put in during busy periods will be taken in the form of prolonged breaks and holidays. The agreement borrows heavily from the one-off deal signed by unions for Rover's new Hams Hall engine plant near Longbridge.

Under the German system older workers are able to "bank" their extra hours so they can work part-time for full-time rates in the period up to retirement.

Union officials said there was no question of pay reductions in order to cut costs. In fact, employees' representatives expect British pay rates will eventually be raised to match those in Germany, partly because of the additional "transparency" afforded by the euro.

Unions estimated that BMW's German workers are paid about 30 per cent more than their British counterparts. The new currency will make it far easier for workers to compare their pay with colleagues in other countries and unions believe management will be unable to resist a gradual evening out of rates, given enhanced productivity.

The deal is aimed at saving Rover's Longbridge plant and securing the future of Rover Cars. It is estimated that the radical package will go a long way towards producing the pounds 150m reduction in wage costs demanded by management.