Workers at steel products maker Metalrax are set for a bleak Christmas after it announced the closure of one of its plants in the Midlands.
Up to 165 jobs could be lost at the Bacol Fine Blanking plant in Bromsgrove which is scheduled to close at the beginning of May.
The factory, which makes small components for the automotive sector, has fallen victim to rising steel prices and a massive decline in orders as its customers moved overseas.
Losses at the firm were mounting for the last two years, and were threatening the future of the entire Metalrax group, the company said.
The closure decision followed a review of the whole business announced by chief executive Andrew Richardson.
Mr Richardson launched the review after the Birmingham group - which employs nearly 2,000 across all its businesses - posted a profits warning in October.
He said: "In October Metalrax announced that the financial performance of certain parts of the Group had worsened and that an in-depth review of all its of activities would be undertaken.
"Although actions at the Bacol Fine Blanking business in Bromsgrove have been taken during the last few months to resolve trading performance difficulties, by increasing selling prices and ceasing supply to certain unprofitable customers, operational difficulties persist and significant losses have continued.
"Following an exhaustive review it has been concluded that the Bacol Fine Blanking business should be proposed for closure.
"Consequently, all 165 employees at Bacol Fine Blanking are considered at risk of redundancy. It is proposed that redundancies might commence in March with production at Bromsgrove potentially ceasing in April 2008."
Mr Richardson said Metalrax was now seeking buyers for the factory, which is located at the Aston Fields Trading Estate.
He said he had already received a 'reasonable' level of interest for a sale, which he said was the preferred option.
"We will sell it if we can, that would be a good outcome where we could save at least some of the jobs."
The factory makes automotive components which are used in gearboxes and braking system.
Orders had fallen as many of its customers closed or moved overseas, while the firm was battling with higher steel prices and cost down pressures.
One order - for parts for mobile phone systems - had declined by 70 per cent, Mr Richardson said. Meanwhile export sales to the US had reduced as vehicle production slowed across the Atlantic.
Mr Richardson said: "We have put up the prices and tried to reduce the costs by making efficiency improvements at the factory.
"We also stopped selling parts which were unprofitable. But despite all these actions the company was still losing money.
"Having failed to get the company back into making a profit, we reached a point where to protect other jobs in the rest of the group it was necessary to take this action.
"The losses were worsening, and there was a danger it could have dragged the whole group under."
Mr Richardson said no other site in the Metalrax group was preparing for closure or would be affected by the closure.
