Struggling car manufacturer MG Rover was told yesterday by union leaders that it faced a ballot on industrial action following a breakdown in pay talks.
The warning was delivered as mounting difficulties faced by car manufacturers worldwide were highlighted with DaimlerChrysler admitting its US Chrysler division had run up a €2.2bn operating loss in 2001.
The ballot by the Transport & General Workers Union at Rover follows overwhelming rejection of two separate offers from the company, the last involving a 2.5% wage increase in return for more flexible working arrangements; 98% of the Longbridge employees own shares in Rover which was the subject of a management buyout from German car group BMW.
"We told the company today that we have made a request for a ballot on industrial action although we will continue to try to resolve our differences in the meantime," said a TGWU spokeswoman.
Relations between Rover management and workers have been further strained by a blunt message from the company telling the 7,000 staff at Longbridge in Birmingham to shape up or ship out.
A memo under the title Job Shop explains: "It appears there are people here not prepared to continue to fight for our success. Therefore we will be establishing an outplacement service on site should any of you require assistance in finding alternative careers."
Further tension has been caused by the company derocognising Bill Mitchell, a shop steward in the paintshop for the last decade, apparently for opposing the pay offer.
A company spokesman would not confirm the reason for his derecognition just saying it was "as a result of his conduct as a shop steward".
The Rover official said all efforts were being made to resolve the dispute over pay and he insisted the company was still on course to break even this year.
Meanwhile there were tears and cheers at Dagenham as the final Ford Fiesta rolled out of a factory which has been building automobiles for 70 years.
Ian McAllister, Ford of Britain's outgoing chairman who started his career at the plant admitted: "I feel sad this is the end of vehicle production." Jeff Body, operations manager at the works who retires at the end of the shift, added: "There was a lot of noise with honking of horns as the last car rolled off at 3.50pm. It was amazing quite a festive atmosphere but now I feel deflated."
Trade and industry secretary Patricia Hewitt sounded a more upbeat note. On a visit to BMW's Mini factory in Oxford she said the launch of the small car in North America and Japan next month showed UK manufacturing remained a "very bright prospect".
