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.
In a statement on its website, JCB welcomed the vote by its production employees supporting the shorter working week to protect the jobs of their colleagues.
The decision was applauded by JCB Chief Executive Officer Matthew Taylor, who said, ''The ballot result shows the tremendous unity amongst the JCB workforce and a great team spirit, which I applaud. They have looked after the needs of one another rather than the needs of the individual and that is to be commended. From a JCB perspective this is very positive because it means we retain the skills of a wider workforce who have contributed to the success this company has enjoyed over many years. It means we retain the fundamental strength of our workforce and this is very welcome news as it puts us in a very strong position to take advantage quickly of the upturn in the market when it comes.''
The union said the move, which is believed to be unprecedented in the current economic situation, showed that the recession was getting worse. It called upon the UK government to initiate a major public works programme to ease the impact of the recession.
GMB officer Keith Hodgkinson was quoted in the media as saying, "I am delighted that we have been able to save 350 jobs. The short time is part of a worsening recession and these GMB members expect the government and the Bank of England to take the necessary steps to begin large-scale public works to at least slow the recession down and prevent it getting too deep."
The union said pay lost by the JCB workers would be partly made up by money from a government fund, and the factories impacted by the move would include Wrexham in North Wales and sites in Cheshire and Staffordshire. JCB has around 10 plants in the UK, though it operates across 150 countries world wide as the third largest global manufacturer of construction equipment.