The 3,000 employees at NedCar should all keep their jobs for at least another year, despite the fact that production of the Smart Forfour model has ended, according to dpa-AFX news.

Unions and management reached an agreement on Tuesday. A week earlier NedCar workers had voted to strike if Mitsubishi did not guarantee jobs.

The company, which is now 100% owned by Mitsubishi, will look for a model to replace the Smart Forfour in its production line-up and continue to build the Mitsubishi Colt.

If a replacement model is not found by April 2007, around 1,000 jobs will go.

Production of the Colt is only guaranteed until 2010. The model was designed as a clear attack on the European market, but has not sold as well as hoped. Mitsubishi's plans for the plant beyond that date and its strategy for Europe are unclear.

Mitsubishi Motors Europe spokesman Daniel Nacass told just-auto: "We have indeed committed to built the current Colt at NedCar until the end of its life cycle.

"What will happen afterwards depends entirely on NedCar´s ability to become lean and cost effective in all
areas.

"We cannot make a final decision for 2010, without any tangible manufacturing cost indicator at this stage. In this respect, MMC has demonstrated willingness and openness."

Nacass was referring to a statement from the automaker last week which said: "MMC intends to maintain a European production location and we believe that NedCar, which is our only production facility in Europe, can become a cost-competitive company. To this end we intend to extend as much support as we can."