Land Rover dealers were left counting the cost of strike action this week after the company's workforce downed tools on Monday. As AM went to press, all of the 8,200 workers at the carmaker's Midlands plants in Solihull were believed to have mounted picket lines.

A company spokeswoman said the firm was working hard to minimise disruption to its retail network. Union leaders warn production will be badly hit by the 24-hour walk-out. The factory normally produces 165,000 units a year and exports about 70% of production to 142 different markets.

Now there are mounting fears that strike action could jeopardise future investment at the factories as parent firm Ford looks at all areas of the business to cut costs and maximise efficiency.

The dispute centres on pay. Workers have been offered a 6.5% pay increase over two years, which the carmaker says is above the rate of inflation and industry settlements in the UK. But the Transport and General Workers' Union says its members at Land Rover believe the pay offer should be increased to reflect the contribution they have made to the company's profits.

Ford's Premier Automotive Group, which is made up of Aston Martin, Jaguar, Land Rover and Volvo, made a profit of £90m in 2003 compared with a £405m loss in 2002. It was helped by the new Range Rover, Jaguar XJ and Volvo XC90 as well as the blue oval's banking division.

Workers voted against the offer, arguing that the deal would not give them parity with employees at Jaguar, which Ford also owns. During recent weeks, the threat of strike action has escalated rapidly after workers and employers clashed over an overtime ban and the withdrawal from a flexible working agreement.

In a statement, Duncan Simpson, national official at Amicus, said: “It is with reluctance that we've moved to strike action but we hope the company will rethink its position and agree to negotiations. We are prepared to meet the company at any time without preconditions. The ball is in their court.”

Land Rover says workers enjoy a comprehensive package of employment benefits that places them at the top of the pay league. Unions are due to meet again this week and do not rule out further strike action.