Japanese car maker Honda has confirmed that UK workers will face a 3% pay cut when production resumes in June.
The plant in Swindon, which employs 3,500 workers, has been shut for four months following a sharp fall in demand.
Workers have been paid during the closure but when they return to work next month they face a temporary salary cut of 3% with management taking a 5% cut.
The wage reduction, which has been agreed by the representative council, is expected to be in place until March 2010.
Unite's regional officer Jim D'Avila said: "In return for a temporary 3% cut in pay we can ensure that hundreds of workers will stay in work.
"The workers have been paid during this period and will pay the company back by working extra hours once they return to work. This agreement sets an industry benchmark for protecting jobs during this recession."
Honda, like other manufacturers, is facing one of its most testing periods, but it is hoped the new scrappage scheme will revive sales and encourage motorists to trade in their old cars for brand new models.
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