Staff at Swindon's Honda plant have been told they will have their pay cut when they return to work in June.
The workers are already on a four-month shutdown, as Honda bids to cut production in line with the fall in demand with new cars.
However, now the line workers have been told that they will face a three per cent pay cut, and management a five per cent cut, when work resumes. The pay reduction will remain in place until March 2010.
This pay cut is on top of new overtime rules introduced during the shutdown. During the shutdown workers have banked hours which must be worked off in overtime before they start to get additional pay for working extra hours.
Honda said it has introduced the cuts because not enough workers took redundancy when it was offered last February, and that it needs to cut costs to ensure the long-term survival of the Swindon plant.
Only production staff, who install and upgrade machinery rather than make cars, are continuing to work at Swindon during the shutdown.