JCB workers vote in pay cut to save colleague's layoffs

25 October 2008

Thousands of workers at the construction equipment manufacturing firm JCB have opted for a pay cut of £50 per week, rather than prevent the loss of 350 jobs.

The GMB trade union, which is a general trade union with over 600,000 members in the UK, has said that 2,500 members across seven JCB plants in England and Wales have opted to accept a four-day work week for coming 13 weeks with a view to help the company weather the economic downturn. JCB, despite recording pre-tax profits of £187 million a year ago, has been hit badly by the economic downturn in the property and construction industry, and had warned of a rapid decline in demand this July. 

Over 4,000 employees at the company will now work a 34-hour, four-day work week. JCB employs around 5,000 people in the UK, and around 8,000 worldwide. Being a manufacturer of construction equipment, it was directly in the line of fire when the economic slowdown in the property and construction industry registered a sharp fall in demand, which impacted the derived demand for JCB's products.

Last week, the company decided to cut output at its factories in the UK by 19 per cent, putting 500 jobs at risk. After a week of discussions with the GMB union, both the workers and the management came to an agreement to put shop floor workers on a shorter work week to save as many jobs as possible. However, around 150 workers would still stand to lose their jobs by the end of the year. 

GMB members voted more than two to one in favour of the move to a shorter week. The new four-day week will be effective next month, for at least six months. 

JCB had cut 400 jobs in July, at the same time when it warned of a rapid decline in demand, which saw builders struggle.