The Llanelli plant must improve efficiency or it will be closed

Car components company Calsonic Kansei Europe said it would give the plant a year in which to improve efficiency.

Meanwhile, it said staff numbers would be cut by 10%, with 60 going under a voluntary redundancy scheme. Calsonic is one of the town's largest employers.

Last December the firm said it was moving its headquarters from Llanelli to France, but promised no job cuts.

The remaining staff at the plant which employs just over 1,000 in total are being asked to accept a pay freeze over the next 12 months, the firm said.

The management team takes no pleasure from the implementation of such severe measures, but we are in a "survival" situation here in Llanelli Calsonic statement

Calsonic president Dave Pallas said: "The conclusion from reviews in Japan is that senior management in Europe will be given 12 months to recover the situation or face eventual closure in the next few years."

The company said a "survival" plan had been prepared and explained to all employees at meetings held this week.

In a statement, the firm said efficiency levels at the Llanelli plant were currently the lowest in its European group and that a major initiative would take place aimed at improving them.

'Difficult time'

"The management team takes no pleasure from the implementation of such severe measures, but we are in a "survival" situation here in Llanelli and we are absolutely determined to recover from the situation we are in today," said a spokesperson.

"This is a particularly difficult time for our employees, some of whom have been asked to accept a salary freeze and effectively work harder to support our company survival plan."

The Japanese-owned company confirmed in December that it was moving its HQ to Paris to be closer to its European clients, in particular Renault.

Emyr Evans, of the Transport and General Workers Union, said: We were aware of the financial state of the company. Redundancies weren't mentioned then.

"The Transport and General Workers Union are very concerned about the announcement regarding redundancies."

The union is now in consultation with Calsonic's management to find ways to safeguarrd the future of the plant.

The manufacturer shed around 90 jobs in Llanelli in early 2003, blaming falling sales in the UK.