Tyre giant Goodyear Dunlop is to end production at a UK factory with the loss of 585 jobs - putting nearly 40 posts at its plant in Wolverhampton at risk.
The firm yesterday said the move would affect management and manufacturing jobs in Washington, Tyne and Wear.
A consultation process has been launched with union officials over the scale of the redundancies.
Richard Johnson, managing director of Goodyear Dunlop UK, said: "We have worked with our unions and associates to improve cost competitiveness at our Washington plant.
"We have been unable to manufacture tyres at a competitive cost level.
"The market for the type of tyres made in Washington is very competitive and is increasingly dominated by low-cost suppliers from Eastern Europe and the Far East."
The Washington plant was built in 1968 for Avon Tyres, with ownership transferring to Goodyear Dunlop two years ago.
A further 39 jobs at the firm's plant in Wolverhampton, which supplies Washington with components, could be lost as a result.
"This is a difficult time for everyone involved," added Mr Johnson. "It is important that our attention is now focused on assisting our employees.
"We will work diligently throughout the consultation process to do everything possible to help them prepare for the future, including the provision of recruitment support and outplacement services.
"Employees will be made aware of vacancies at other Goodyear Dunlop locations."
The firm employs 2,500 workers in the UK, including 450 at Wolverhampton.
Mark Wilson, regional officer of the GMB union, said: "This is devastating news for the workers and their families and for the economy of Tyne and Wear.
"We will be exploring every possible avenue to save these jobs, including the possibility of selling the plant as a going concern."
The North-east Chamber of Commerce described the move as "devastating" news for the region.
Policy director Andrew Sugden said: "For nearly four decades the plant has been a major presence in Tyne and Wear with generations of families working at the site.
"The announcement is indicative of the pressure created when competing in a global market, an issue compounded particularly for manufacturers by rocketing energy prices and cheap labour abroad."
