The West Midlands breathed a collective sigh of relief last night after Ford gave its backing to a plan that will secure the future of the Land Rover plant at Solihull, safeguarding thousands of jobs.
Management and unions had spent the past few days modifying proposals which had been rejected by Mark Fields, Ford's most senior Europe-based executive, last week.
Though a final rebuff for the plan would not have meant the immediate closure of Solihull, which employs around 8,000 people, Land Rover officials had warned that it would have faced a "slow and lingering death" as it was starved of investment.
Yesterday, Mr Fields said Solihull had responded to last week's developments and committed itself to meeting Jaguar's competitiveness levels within three years.
Jaguar, like Land Rover, is part of Ford's premier automotive group which includes Volvo and Aston Martin.
Commenting on the deal last night, Mr Fields said: "I am prepared to buy off on that and work with the team to deliver the ultimate objective of world-class levels in five years. Today's outcome is a very important step forward."
The deal includes changes to operational processes, working practices and culture, according to a statement from Land Rover last night.
Mr Fields said that progress on the "roadmap" would be reviewed "by the end of the year".
Unions responded positively to the announcement, though the plan will still have to be approved by a ballot of the workforce.
The Transport & General Workers Union said it believed the plan "secures the future of the Solihull plant and the long-term job security of members."
"On the basis of today's agreement we would expect that Solihull, which has been the home of Land Rover for over 50 years, to remain so for the next 50 years," said Dave Osborne, the T&G's national secretary for the car industry.
He said the plan would mean Solihull accepting working practices and efficiencies already adopted at other Ford plants, but on the basis of the agreement the T&G expected Ford to continue to invest in both Solihull and Gaydon.
Last week Mr Fields said that though exchange rates were hitting exports to the US, a key market for Land Rover, Britain remained an attractive place to make cars "under the assumption that we are going to have world-class levels of quality, cost and productivity."
Joe Greenwell, the chairman and chief executive of Jaguar and Land Rover said that as a result of the agreement Land Rover "has a great future with great new products."
The priority would be to secure the backing of the workforce for the changes, he said
Despite last night's relief, the plant will still lose some 1,000 jobs when Ford switches production of the Land Rover Freelander model to the Jaguar plant at Halewood on Merseyside.
Figures earlier this week from the Society of Motor Manufacturers and Traders showed that in Britain, Land Rover had increased its sales so far this year from just over 26,000 to almost 27,600, claiming just over 5% of the UK car market.
