A plan drawn up by Land Rover plant managers and union officials to improve productivity at the Solihull factory near Birmingham was accepted by senior Ford officials late on Wednesday, avoiding the closure some industry observers had been expecting.

Had Solihull been closed, production likely would have been moved north to Halewood on Merseyside, which, in any case, will take over Freelander SUV production in 2006.

Solihull, which currently builds Land Rover's full three-model SUV line as well as the 'original' Defender heavy duty off-roader, will now continue in production with no loss of any of its 8,000 jobs.

The first so called 'road map' plan for improvements at Solihull was rejected last week by Mark Fields, executive vice-president of Ford Europe and the Premier Automotive Group, and Joe Greenwell, chairman and chief executive of Jaguar and Land Rover.

They reportedly said progress had been "encouraging" but the unions and plant management, also criticised by Ford, had not gone far enough.

The BBC reported on Wednesday night that Land Rover managers and union leaders welcomed the deal.

"Land Rover is poised to make a major impact," Land Rover chief executive Greenwell told BBC News 24.

"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," Dave Osborne, national secretary for the car industry at the Transport and General Workers' Union, told the broadcaster.

The BBC said the rescue strategy is aimed at making Land Rover as competitive as Ford's Jaguar operations within three years, and as competitive as other global car makers within five years.

Changes will be made to working practices but union officials reportedly stressed these would be no different to those already in existence in other Ford factories in the UK. Workers will now vote on the planned changes and the unions said they were confident the deal would be ratified.

Dave Osborne, national officer of the Transport and General Workers Union, said: "On the basis of the agreement, we expect that Solihull, which has been making cars for 50 years, will remain safe for the next 50 years."

The TGWU, Amicus and the GMB said in a joint statement: "While the trade unions
have responded positively to the need for change we expect the company to
continue to invest in the Land Rover business at Solihull and Gaydon.

"Details of the negotiations will be conveyed to shop stewards and members over the next week followed by a ballot."

Richard Burden, Labour MP for Birmingham Northfield, told the Birmingham Post it was "excellent news" that an agreement had been reached. "I congratulate both sides for the effort they have shown," he said.

The challenge to bring efficiency at Solihull up to the level of factories which produce Jaguar cars was a "substantial" one, he told the paper.

Mark Fields, head of Ford in Europe, told the Post that managers and workers at Solihull had responded positively to a meeting the two sides had last week. The road map had been "refined" with sufficient detail to achieve the same levels of competitiveness as in Jaguar factories within three years.

"I am prepared to work with the team to deliver on the ultimate objective of world-class levels in five years," he told the paper. "Today's outcome is a very important step forward and the key now is securing employee commitment to the plan and its implementation. We will give the team all the support we can to achieve that and I look forward to reviewing progress by the end of the year."