The manufacturing sector has suffered a further blow with the planned closure of a Midlands factory and the loss of 138 jobs.

Parker Hannifin yesterday broke the news to employees at its pneumatics division plant in Cannock.

The divisional HQ employs 189 people.

Around 50 in research and development, or office roles, will be retained at a new premises, a spokesman said.

Twenty years ago the site employed 600 people.

A spokesman said: "The European Pneumatic Division operates within a market that continues to be characterised by aggressive competitors offering products at ever lowering prices. " As a consequence, to improve the profitability of the division and maintain a long-term competitive position, Parker is proposing to phase out manufacturing at Cannock over 12 months, and replace the current operational infrastructure with a division headquarters and technical design centre in the Cannock area."

The factory makes pneumatic control system components such as cylinder valves for equipment including packaging machines and food processing factory equipment.

James Perkins, marketing manager at the company's Hemel Hemstead-base, said some work would be transferred to a site at Redruth in Cornwall and other areas will go to Sweden, France, and the United States.

No new site has been identified.

A consultation period was under way with staff and it was expected production would stop within a year.

Enginering union Amicus has a number of members.

Parker Hannifin acquired the site in 1985. The company employs more than 55,000 people in 46 countries worldwide, and over 3,500 people in the UK. It has 22 manufacturing plants in the UK including a tube fittings operation at Cradley Heath and a hose fittings works at Halesowen.