Lembit Opik: Campaiging to save the plant

Officials from the AEEU have confirmed that the foundry will be redeveloped rather than the operation moved to a new site at a nearby business park.

Some part time workers at KTH will also be asked to take an 18 per cent pay cut.

KTH is the biggest employer in Llanidloes which has a population of just over 2000 and closing the factory would be a major blow to the community.

Local MP Lembit Opik has been at the forefront of a campaign to keep the factory open.

The company announced earlier this year that the factory would close in August, after losing orders from car manufacturers - mainly Volkswagen.

Since then discussions between management at the firm the WDA and the Welsh Assembly have been continuing.

Alwyn Rowlands from the engineering union the AEEU said closing the factory would have been akin to the steel closures currently hitting plants in south and north Wales.

He said: "The closure of this company would have been devastating.

"There are decent rates of pay within this company and it is important employer in the area."

The managing director of the company John Flintham said: "It is our intention to develop a world class facility with a long term future."

"Whilst the difficult trading conditions in manufacturing continue I am confident that we will have a facility and workforce that can compete in the automotive market.

"This should allow for future expansion of the site in the coming years."

Aid limited

The level of aid that can be extended to the company is strictly limited.

Powys is not listed as an Objective One area so that source of European grant aid is not a viable option for the region.

Nor is Llanidloes an assisted area - which means that it does not qualify for regional assistance.

Whilst the difficult trading conditions in manufacturing continue I am confident that we will have a facility and workforce that can compete in the automotive market.

Managing director John Flintham

KTH has blamed the loss of two major contracts for a slump in orders for the move.

The firm was part of Sir Geoffrey Robinson's Transtec group before it was taken over by a Midlands-based consortium last year.