George Fischer Lincoln Limited says the parent company has put forward a proposal to stop production at the site in North Hykeham, near Lincoln, which employs 400 people.

The company is part of the Swiss based engineering group Georg Fischer, and makes castings for the car industry.

A spokesman for the firm stressed that the closure is only a proposal and no final decision has been made.

Consultation period

The workforce have been informed of the plan to shut down the factory and discussions will now take place with the union representatives.

The company is cutting 1,000 jobs worldwide to try to increase profits.

It took over the North Hykeham site in 1980 from the Derby firm Leys Malleable.

There will be a consultation period with the Amicus and GMB unions.

Pension worries

John Wilson, the spokesperson for the GMB in Lincolnshire, explained how many workers thought their future was fairly secure.

He said: "They were even talking up until yesterday of production bonuses.

"So there is an air of shock and concern.

"If the company ceases to trade there are people with long service and pensions who are particularly worried."