Hundreds of workers at Agco, formerly Massey Ferguson, in Coventry face an uncertain future after it was announced the firm is switching to a three-day week.

The strength of the pound is being blamed for a decline in orders, which has led to the lay-off.

Workers were told yesterday that the three-day week would last throughout October.

A spokeswoman said the situation would be monitored before a decision was taken on whether to resume full-time working.

She said:

“We are watching the order book quite closely.

“The strength of the pound has done some damage to our position in the export market.

“That’s the reason for the low activity.”

In May Agco chairman Robert Ratliff said the firm would have to consider its position in this country if Britain did not join the Euro.

But he quickly moved to reassure workers that the company was not considering shutting its Banner Lane plant in Tile hill after making the comments.

Last year the plant produced 14,000 tractors, making it one of the biggest producers in Europe, but this was well below its capacity of 25,000 tractors.

In the run-up to Christmas almost 2,000 workers were put on a four-day week because of falling numbers.