* Porsche, labour agree on steps to safeguard jobs
* Workers agree to more flexible hours
* Porsche to refrain from redundancies through 2020 (Adds CEO comment, detail and background)
BERLIN, July 15 (Reuters) - German sports carmaker Porsche will spend 1.1 billion euros ($1.21 bln) through 2020 to upgrade its main production and research sites for more models.
Volkswagen-owned Porsche is building a new engine plant and body shop at its core factory in Zuffenhausen, in southern Germany, which will take over production of the Cayman series from VW in 2016, adding to assembly of Porsche 911 and Boxster models.
The investment target is part of a deal announced by Porsche's management board and labour leaders on Wednesday, designed to safeguard jobs at Zuffenhausen, the R&D centre in Weissach and at sales operations in Ludwigsburg where about 13,000 people are employed, a labour official said.
"Porsche is facing great challenges like all carmakers," Chief Executive Matthias Mueller said, citing the push into fuel-efficient technology and digitalization. "That's why we examine and improve all processes and set the future course in time."
Porsche, together with luxury division Audi the main profit contributor for parent VW, plans to roll out a seventh model by 2020 but has yet to make a final decision on the vehicle.
The Stuttgart-based manufacturer plans to sell more than 200,000 cars for the first time this year, powered by demand for the Macan compact sport-utility vehicle it introduced in April 2014.
The new agreement with labour leaders obliges Porsche to refrain from compulsory redundancies at its southern German facilities until 2020, in return for steps to expand daily working hours and other productivity-boosting measures which Porsche declined to specify.
($1 = 0.9074 euros) (Reporting by Andreas Cremer; Editing by Susan Fenton)