The company also announced 156 job losses in August 2005

TRW Automotive, which employs about 500 people in Pontypool, blamed the end of a contract for the job losses, which may include compulsory redundancies.

The company, which makes braking components for several manufacturers, will cut 103 manufacturing jobs and 25 in staff and support roles.

Manager Steve Stott said the industry was "extremely tough" and it had to be competitive to secure its future.

Consultation has begun with employees and trade unions.

We have to take steps to manage our cost base appropriately Steve Stott, TRW

Mr Stott said a contract worth about a quarter of the work at the factory was coming to an end in February.

"Despite success at winning some new business, our overall production will be down next year and we face reduced profit margins. We have to take steps to manage our cost base appropriately," he said.

"We hope to achieve this reduction through volunteers, but recognise that there may need to be some compulsory redundancies.

"We will provide all necessary support to our employees at this difficult time including outplacement support to help people find alternative jobs."

Emergency meeting

In August 2005, 156 job cuts were also announced at the Pontypool factory, which the company blamed on a fall in business partly as a result of the closure of Rover in the West Midlands.

Graham Smith of the trade union Amicus said he was disappointed that a valleys community was hit by job losses, on top of last year's TRW cuts.

The American-owned company is one of the biggest of its type in the world, with about 63,000 workers in 26 countries.

A bitter blow to an area which can ill-afford to lose so many jobs Conservative AM Alun Cairns

Torfaen MP Paul Murphy and AM Lynne Neagle said they had organised an emergency meeting with company managers on Friday.

In a joint statement they said: "We understand that the workers have been given a presentation by the company which underlined the long-term security of the plant.

"Whilst this does represent some good news, it is obviously no comfort for those affected by today's job loss announcement."

Conservative AM Alun Cairns said the announcement was a "bitter blow to an area which can ill-afford to lose so many jobs".

He added: "This news could not have come at a worse time for Labour, on the day they launched a key election pledge on the economy".

Plaid Cymru AM Jocelyn Davies said it was "a serious blow to Pontypool and Torfaen as a whole".

Liberal Democrat AM Kirsty Williams said: "I hope that the Welsh Assembly Government will today give assurances that help and support will be available to the affected workers, but this latest announcement shows that they still have not got to grips with the decline in manufacturing in Wales".