Around 75 jobs at Handsworth- based Copal Casting are at risk after parent company Alumasc Group announced that the business could be sold.
Kettering-based Alumasc said that Copal, which produces aluminium castings for the automotive industry, was no longer financially viable.
The group also confirmed that engineering subsidiary, Alumasc Precision, was in discussions with an unknown bidder for Copal. Alumasc Precision's two other component businesses - based at Kettering and Milton Keynes - will remain with the company.
Alumasc Precision contributed 32 per cent to the group's operating profits in the year to June 30 2004.
Copal has suffered greatly from the demise of MG Rover which made up around 40 per cent of the firm's business.
Before the collapse of the car giant, Alumasc had already announced a review of Copal which had operated at a loss for several years.
Chief executive of Alumasc Group, Paul Hooper, said Copal had been having some degree of success by diversifying production into components for earth-moving and heavy plant vehicles.
However, the company would benefit from the elimination of its operating loss, Alumasc said in a statement.
Mr Hooper said staff at Copal had been informed and, at present, the site was operating as usual.