CREWE, UK - Rolls-Royce Motor Cars boss Graham Morris struck an innovative deal with workers at the Crewe factory just days before leaving the company on 24 December.
In a bid to help the luxury carmaker through a sales slump, employees will now 1/8bank' time through a new flexible work plan. From 4 January, they will work a three-day week - and when demand rises, they will work longer hours.
Rolls-Royce promised that no reductions would be made in its 2,350-strong workforce during 1999. The agreement affects all but 100 workers in specialist jobs.
Chief Executive Morris - who announced his resignation after the Rolls and Bentley brands were split between Volkswagen and BMW - said the agreement was vital to the future of Rolls-Royce.
'This is a signficant arrangement which gives us tremendous flexibility. But it also takes us into a new era. After all the instability of 1998, people working here now have their confidence restored,' said Morris.
'This is a complex deal which involves a number of different working patterns and affects some more than others.'
Each individual will bank up to 300 hours in 1999 and pay the time back to the company by the end of 2000.
'The big difference with this arrangement is the understanding we have over the payback period,' said Morris. 'If the time has not been paid back in the agreed period, then the arrangement will continue after 2000.
'This solution is typical of the way things are done here - it has been talked through, rather than negotiated,' said Morris.
Engineering Director Tony Gott has been named temporary chief executive while a full-time replacement for Morris is found.
'All the indications are that demand for our product will rise in the second half of the year, but before then, there could be times when some people can stay home for as long as a week and still get paid,' said Morris.
'As our volumes grow, we'll use the payback reserves to extend shifts instead of taking on extra people. We don't want to get rid of people who may be surplus to current requirements and then have to try and get them back again - this solution helps us smooth out the labor pool.'
Senior union spokesman Steve Taylor, who is a member of the VW European works council, said: 'We've been hit by the takeover, lack of confidence, the recession and the strength of sterling - it's obvious some difficult months lie ahead.'
VW is understood to be considering relocating some component manufacturing from Germany to Crewe in an effort to make use of the labor surplus at Rolls-Royce.