Peugeot last night announced it is to axe almost a third of the workforce at its Ryton factory in Coventry, renewing doubts over the long term future of the plant.
The French car maker revealed it was ending one of the three shifts producing the 206 model, with the loss of 850 jobs - just a year after the night shift was jettisoned at the expense of 700 workers.
The cuts are another hammer blow to the West Midlands automotive industry after Jaguar recently ended car production at its Browns Lane plant in Coventry and the continued threat of job losses hangs over Rover workers in Birmingham as part of its proposed deal with China's state-owned Shanghai Automotive Industry Corporation.
Last night, Peugeot said 850 jobs would go from Ryton's 2,800-strong workforce after recent attempts to scale back production to match falling demand for the 206 were "no longer sufficient".
The latest cuts mean the Ryton workforce will have been more than halved by the company in just over 12 months - it employed 4,350 at the Coventry site in early 2004.
Union leaders are to urge Trade and Industry Secretary Patricia Hewitt to step in and secure a long-term future for the plant.
In a statement, Peugeot admitted 206 sales were falling and, as a result, it had to "review its manufacturing strategy" for the car and " adjust its output in line with market demand".
It said it plans to scrap the 'C' shift, which works from Friday to Sunday. Workers were informed of the cuts last night.
The statement added that Ryton would now become the main European production site for the 206.
However, Peugeot intends to end production of the car in 2010 and a spokesman refused to be drawn on the plant's future after the model is discontinued.
"I don't think we can be certain of anything over the next five years and decisions of that sort will be taken nearer the time," he said.
Dave Osbourne, senior Transport and General Workers Union negotiator, said he would be seeking assurances over Ryton's future at a meeting with Peugeot management which is planned for Thursday.
"We are not going to wait until 2009 to ask about what happens next.
"We believe our members have earned the right to have a future at the plant and we need to find out what that is going to be," he said.
"Needless to say, we are very disappointed by the decision coming as it does so soon after the night shift was ended last year.
"We don't see why the volumes of 206 being produced by the plants in France cannot come to Ryton now that those plants are going to be producing the 207 model."
Peugeot said it intended to offer voluntary redundancy and early retirement as well as exploring redeployment opportunities to other sites. It would also work with local employment services and business contacts to organise jobs fairs at the site for workers hit by the latest reductions.
Earlier this month, the company was told it could not spend a £14.4million Government grant on developing new models at Ryton, following its decision to build the new 207 in France and Slovakia.
Last night, the company spokesman described the latest job cuts as "coincidental" to the loss of the DTI grant.
Ryton produces the Peugeot 206 and last year built about 180,000 vehicles, 60 per cent for export.
A spokeswoman for the Transport and General Workers' Union said: "While the job losses are bad enough, the major concerning issue is Peugeot's failure to highlight a new model for the 206.
"We are, therefore, looking to talk as a matter of urgency to the chairman of the company and the Secretary of State Patricia Hewitt to resolve this and secure a long term future for the plant," she added.