Redditch-based car parts and aircraft engineering firm GKN has said it is cutting staff and shutting down plants across its global operations.
GKN, which employs about 5,000 people in the UK, said it is taking "strong action" to offset an expected 70% plunge in fourth quarter automotive pre-tax profits as demand continues to weaken.
The Redditch-headquartered group has about 2,500 staff in its UK automotive operations and has two plants in Birmingham and one in Telford in the West Midlands.
It said the 2,500-strong UK aerospace division is largely unaffected by the overhaul. It is not clear how many of GKN's automotive workforce will be affected, but a spokesman said the group will be looking to take action "across the board".
The firm said full-year group pre-tax profits would also suffer as a result of the automotive woes and are now expected to be about a fifth lower than in 2007.
The group said sales in the automotive division are now expected to be about 15% lower in the fourth quarter year-on-year.
Its aerospace division "remains robust", but could see revenues in the fourth quarter knocked by about 8% if a strike by Boeing machinists continues until the end of the year.
GKN said car and light vehicle sales had dropped across the world, hitting its production schedules. Input costs have also been soaring, with scrap steel peaking at 870 (£564) a tonne in the third quarter, although it said raw materials had started to fall sharply back in price. Steel now stands at less than a third of the peak price, at 230 (£149) a tonne.
GKN said: "We are now finalising plans to reposition our businesses to deliver acceptable profitability and cash generation through this difficult period."
Keith Hodgkinson, the GMB officer who represents nearly 1,500 members in GKN at Telford, said: "GMB has been aware for some time of the precarious situation regarding demands for the automotive products manufactured at Telford.
"We have in place an agreement with the company that members who wish to opt to leave the company via voluntary redundancy are free to do so and over the last few quarters over 100 workers have taken up this option.
"We are seeking further information from the company following their statement today."
GKN is cutting all of its 1,400 temporary workers under the restructure, although none are employed in the UK.
The group employs 42,000 people worldwide, with more than 90% outside of the UK.
It said markets in 2009 also looked "uncertain" and GKN is planning to cut production in line with an expected 8% decline in demand globally, with North US and Europe set for "significant" falls.
GKN expects the aerospace market to hold up well, given recent approval of the US President's 2009 budget, which it said supported its major programmes.