Audi AG reportedly reaches a deal with labor at an assembly plant in Brussels that will cut costs 20% and clear the way for production of the auto maker’s A3 car and upcoming even smaller A1.

The labor deal finalizes details of a preliminary agreement reached in March to cut costs 20% over three years in part by adding three hours to the work week at the plant, bringing it to a total of 38 hours.

The pact guarantees jobs for 2,200 of the 3,000 workers at the plant through the end of 2010 and includes provisions for more flexible work hours, employee profit-sharing and a health-care plan designed to prevent illness and injury.

Audi earlier indicated it would increase overall capacity for the A3 model, now built at its Ingolstadt, Germany, plant, by adding output at the Brussels facility. Production of the A1 model will begin in 2009, and by the end of that year Brussels will be the sole source of A1 output, Audi said in May.