An engineering plant in Suffolk is to close with the loss of 520 jobs amid union claims that work is being shifted to Romania to save money.
The US owner of Delphi Diesel Systems engineering plant in Sudbury told Sky News it would gradually be wound down by 2020, despite admitting the operation remained highly successful.
It said the crackdown on the use of diesel fuel in western Europe meant that demand for the factory’s fuel injectors and filters for commercial vehicles was at risk.
Car manufacturers have, in the wake of the VW emissions scandal, announced a shift towards electric cars with the UK Government confirming plans last month to outlaw the sale of new diesel cars from 2040 and to tax them more.
:: New car sales fall with 20% diesel decline
Industry figures released on Friday showed a 20% fall in the sale of new diesels last month compared with July 2016.
Video: Petrol and diesel cars banned from 2040
The company’s statement said: “The decision is the result of predicted falls in the demand for diesel vehicles.
“Independent analysts predict a substantial decline in the diesel light vehicle market and no significant growth in the much smaller diesel commercial vehicle market.”
It added: “Delphi is sensitive to the implications of this gradual wind down and will work closely with worker representatives to minimise the social impact from this decision.
“A programme will be put in place to help employees find alternative employment in the region or to relocate to other Delphi facilities.”
Unite, which represents staff at the plant, said the decision reflected failures of Government.
The union’s assistant general secretary, Tony Burke, said: “The news reinforces the need for a strong and robust industrial strategy to be activated immediately to secure these highly skilled manufacturing jobs so they remain in the UK rather than move to a low-cost country.
“It is time for the Business Secretary, Greg Clark, to translate the rhetoric of an industrial strategy into practical action to secure essential UK manufacturing jobs, especially in rural Suffolk where such skilled industrial jobs are thin on the ground.”
Delphi said that while some Sudbury production would transfer to Romania, it expected that up to 20% of staff could be moved to other UK operations in Gloucestershire.