BOSSES at British American Tobacco's factory in Southampton today urged striking production workers: "Please don't put its future on the line."

Six pickets and a handful of supporters displayed placards at the 26-acre site's main gate this morning as up to 400 members of union Amicus downed tools for 24 hours in a row over pay.

It also emerged today that the official dispute - the first of its kind at the factory in Millbrook since 1982 - hinges on £1.78 extra pay or more a week.

Managers at BAT, which employs 1,200 people locally, hinted in a statement at the "damaging" implications for the factory if costly industrial action rumbles on.

It has drafted in contractors to ensure production is not hit.

BAT, which made £1.54 billion in global profits for the first nine months of the financial year, said: "It is vital that we do not compromise our competitiveness further."

But Amicus regional officer Mike Budd said BAT's argument was a standard answer put forward by any company involved in a union dispute.

He added: "The gap between us and BAT is so small, just £1.78. Given the company's incredible profits, the figure should be easy to concede to avoid further problems."

One worker, who did not want to be named, said: "Nobody wants to strike because you lose money but we have to stand and fight. All our benefits are going out of the window.

"They have taken away the holiday overtime average, double time overtime and things like that.

"This has been coming for an awful long time and everybody has had enough now."

The BAT productivity warning comes hard on the heels of the company announcing plans to close its tobacco plant in Belfast and to cut 180 jobs at its Zevenaar factory in Holland.

Last year the Darlington factory was also shut down, leaving Southampton as BAT's only cigarette-making factory in the UK.

The seed-to-smoke giant blamed "competitive pressures" in Europe, where manufacturing costs are far higher than those atits factories in developing countries.

According to insiders, the main sticking point between management and the union is the thorny issue of a 0.4 per cent rise on top of what BAT is offering for the first year.

Amicus is keen for a three per cent pay rise or more in the first year, while BAT is offering 2.6 per cent.

It is understood that the second year would see a minimum rise of three per cent, a figure said to be acceptable to both sides.

A 0.4 per cent rise for operators on a basic salary of £23,227 amounts to £1.78 per week, or £1.98 for technicians earning a basic £25,776 or £2.18 for a fitter on a basic £28,327.

According to the New Earnings Survey 2003, when latest figures were available, the average salary of a worker in Hampshire is £25,480; BAT says its average at the Southampton plant is about £26,000.

Benefits to BAT staff include a non-contributory final salary pension scheme, free and discounted shares, life assurance worth four times the base salary, a year-end gift of up to four weeks pay, 25 days annual holiday, plus public and bank holidays and three additional company days at Christmas, and free meals at work.

BAT produces up to 200 cigarettes a second per machine at Southampton, with strong tar brands for export outside of the EU, such as State Express 555, Dunhill and Rothmans International.

BAT MANAGEMENT STATEMENT:

"We are extremely disappointed that some employees have voted to strike at such a critical time for our business.

"The Southampton factory is under considerable pressure to control its costs and remain competitive. That includes being sensible about what we pay ourselves.

"We are operating in an environment where there is global overcapacity within the industry, and where BAT has many factories in less expensive locations.

"We have already seen factory closures and downsizings in the UK and elsewhere across the world, and it is vital that we do not compromise our competitiveness further.

"The revised offer we have made guarantees a minimum increase of 5.6 per cent over the two years, with potential to deliver additional earnings based on productivity gains, and is extremely fair in the current circumstances.

"Employees here already receive terms and conditions which would be hard to match elsewhere in the Southampton area.

"Strike action will only damage our reputation with our customers, and it will benefit no one. The factory in Southampton will remain open for business as usual today."