Workers at Honda's factory in Swindon have agreed a temporary 3% pay cut in an attempt to secure their jobs.
The plant has been shut for four months due to the fall in demand for new cars, but the cut in wages will come into effect when production resumes in June.
Managers at the plant will take a 5% cut in pay, with the reduction in salary for all likely to remain in place until March 2010.
Jim D'Avila, from the union Unite, 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 is hoping the new scrappage scheme, which starts today, will create a surge in demand for new vehicles as motorists are offered a £2000 incentive to trade in their old cars for new one.
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