Workers have rejected a redundancy deal offered by managers at Coventry's Massey Ferguson plant and are balloting for possible strike action.

At a union meeting attended by more than a thousand employees, staff at the tractor plant turned down the offer by Agco, the American company which runs Massey.

The meeting was called after Agco rejected a union rescue package and said it would press ahead with plans to move to France.

The company says the Coventry plant is running at only 50% of capacity.

The plant is "successful" says union

A T&G union spokeswoman told BBC News Online: "Our belief is that the decision to move production to France is because it is much easier to sack British workers."

Peter Booth, T&G's national organiser for manufacturing, said: "Our members are still very, very angry because we know this is a very successful company with a full order book.

"The closure is because the company believes it can make even more money."

He said he expected the workers to back industrial action, which could include a strike, in a ballot next week.

'Under capacity'

A spokesman for Agco said the firm had not yet been told that its redundancy deal had been rejected.

Earlier Agco said the company regretted that it had decided to press on with the closure of the plant.

John Lee, the director, said: "The plant is working at near 50% of its capacity and current long-term forecasts do not support a return to acceptable production levels."

The closure and the Europe-wide rationalisation of the company is expected to save Agco up to $25m by the year 2004.

Unions have expressed concern that one of the reasons that Agco was moving production to France was the failure of the UK to sign up to the euro.