Workers at the Swindon plant of auto major Honda have voted in favour of a 3-per cent pay cut for 10 months to safeguard 490 jobs. Managers will also have their pay cut by 5 per cent.
In return the workers have been offered a bonus of six additional days' leave, according to Unite, the workers' union.
The issue was put to vote following a four month closure of the plant. An overwhelming majority of 89 per cent voted in favour of a cut in wages. They were asked to take a salary reduction as an offer of voluntary redundancy was accepted by very few of the staff.
The plant which has been shut for four months due to a demand slump for new cars is due to reopen next month.
While pay freezes have almost become the norm in the car industry, pay cuts have been rarely resorted to.
According to analysts, a number of struggling companies have been imposing freezes on workers' salaries, but to get employees to accept a pay cut was something quite unusual.
Industry sources say that the move demonstrates the caliber of industrial relations at the plant.
According to Jim D'Avila, regional officer for Unite, workers at Honda were standing together in "true solidarity in difficult times to protect hundreds of jobs".
The steep decline in car production was underlined earlier by industry figures which put the number of cars made to have fallen by 50 per cent in April.
Carmakers are pinning their hopes on the government's car scrappage scheme, started earlier this month, to revive demand.