Jaguar Land Rover (JLR) and logistics firm DHL said on Monday that plans are in place to minimize the impact on production at the carmaker's British plants from a threatened strike by DHL staff.
About 750 of the 1,000 DHL employees serving JLR's plants at Castle Bromwich and Solihull in central England voted for a walkout last week over the company's refusal to award them similar terms and conditions to some JLR staff.
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The Unite union wants a 12.8 percent pay rise over two years for employees who sort parts and 20.6 percent for drivers. DHL said it had offered staff a 4.5 percent pay rise for 2013, plus a guaranteed 3 percent for 2014.
A source close to JLR played down fears that production could stop altogether and that the carmaker was studying "a range of options" to ensure parts continued to reach the production line. The options were not specified.
"It's very early in the process, which gives the unions and the employers space to negotiate," a Unite spokesman said.
A further 800 DHL workers at JLR's Halewood factory in north west England, where the Land Rover Evoque is made, are due to vote on industrial action later on Monday, he said.
Unite also plans to ballot workers at other logistics firms, Staffline and NAC, who do work for JLR, on possible industrial action over the next four weeks, the spokesman said.
A DHL spokeswoman said, "Detailed contingency plans are in place to minimize disruption to the customer (JLR) and we strongly urge the union to reconsider its reckless action and give a clear message to our customer and employees that Unite supports UK growth."
The Solihull plant produces Land Rovers and Range Rovers, while Halewood makes the Range Rover Evoque small SUV. Castle Bromwich builds Jaguars, including its new F-Type. JLR's Solihull and Halewood plans last year moved to three-shift, 24-hour production to meet growing demand for JLR vehicles.
The carmaker - the biggest exporter of manufactured goods in the UK - has been a rare bright spot for Britain in recent years as its economy stagnates, with demand soaring for its luxury cars in China, Russia and America.
A spokesman for JLR, owned by India's biggest carmaker Tata Motors , said the company was "disappointed" that DHL's Unite members had voted in favor of industrial action and that JLR had "encouraged a return to the negotiating table to reach a satisfactory outcome for all parties as soon as possible".
Tata Motors relies on JLR for the bulk of its profits and the British-based company accounts for more than three quarters of the Indian company's revenue. Its shares fell 3 percent.
(Reporting by Rhys Jones; Editing by Louise Ireland)
(This story is refiled to correct company names to Staffline and NAC from Fleetline and NAG in seventh paragraph)