Jaguar shopfloor workers have rejected an inflation-busting pay offer only weeks after parent group Ford said it was prepared to give the loss-making unit more time to show a profit.
Employees at Jaguar's production plants at Castle Bromwich, Birmingham, and Halewood on Merseyside and at the company's technical centre at Whitley in Coventry ignored the advice of local and national union leaders to reject the offer by a narrow margin.
The three-year package includes a four per cent rise this year followed by further annual increases of inflation plus 0.5 per cent up to a maximum of three per cent in 2007 and 2008.
The Transport and General Workers' Union said yesterday that the offer had been rejected by a majority of just 223 votes out of the 3,979 cast - 2,101 versus 1,878.
No-one was talking about strikes yesterday, however, and the T&GWU said the union side of the negotiating committee would meet at mid-day on Monday.
It will not comment further on the ballot until then, a spokesman said.
Jaguar said it was disappointed by the workforce's rejection of its "final" offer, which union officers had recommended members to accept.
"It is a fair and balanced package of pay and conditions which will provide employees with the best possible security in the long terms as well as seeking to secure the competitive position of the company," a spokesman said.
Jaguar now seems to be in a similar situation faced by Solihull-based Land Rover, its sister company within Ford's Premier Automotive Group, this time last year.
Managers and trade union officials were dismayed when shopfloor workers at Lode Lane and Halewood voted to reject an offer.
The situation was resolved, however, when 8,000 workers voted heavily against a walk out in a second ballot only days before Christmas.
Jaguar has recently faced months of uncertainty amid speculation that Ford was looking to sell its luxury car brand along with Aston Martin, which is expected to change hands early next year.