Unions strike deal with Vauxhall to save plant

VAUXHALL car workers will today be asked to back a pay and productivity package which union officials believe will secure the future of the company's two UK plants.

Negotiations have been continuing for weeks in private between union officials and the US-owned car giant following a union warning that the factory at Luton, which employs 4,500 workers, faced closure.

The company is proposing a three-year pay deal of 2.5 per cent this year and the rate of inflation in each of the next two years in return for a new agreement aimed at boosting productivity.

Further negotiations will be held on Wednesday after mass meetings over the next two days at Luton and the company's other plant in Ellesmere Port. Vauxhall is hoping to reach a deal by the end of the month.

Nick Reilly, Vauxhall's chairman and managing director, said the package on offer was "reasonable and responsible" under the circumstances, with Vauxhall facing the need to boost productivity against the background of a high pound and ever increasing competition in the car industry.

Agreement to the three-year deal will pave the way for Luton to build the successor to the Vectra, the Epsilon. Ellesmere Port builds the Astra.

Tony Woodley, chief negotiator for the Transport and General Workers' Union, said tonight: "I believe we have averted the potential closure of any of the UK plants." Mr Woodley said the agreement would not be made without "some pain", but added: "I would sooner have the opportunity of a future when you look at some of the plant closures planned to take place across Europe."