The plant is part of one of Germany's biggest industrial groups

Managers at Krupp Camford Pressings in Llanelli say the plant has "one final chance" for three months from October to avoid closure.

Plans to make 100 people redundant at the German-owned components plant earlier this year were reconsidered.

Llanelli AM Catherine Thomas said the loss would be "devastating".

Ms Thomas, whose father used to work there, said the workers had been "so loyal to the plant" and had "really tried with the unions to save its future".

It's come as a shock in one way but they have known for some time something like this was coming Catherine Thomas AM

"To be honest ," she said, "a lot of the workforce are at an age where they would find it very difficult to find work in the future.

"The impact on the local economy would be devastating. It's come as a shock in one way but they have known for some time something like this was coming.

"We need to look at everything that can be done to save this plant."

In a letter given to all workers on Tuesday, the firm said union representative met company officials in Germany a week ago, where "the focus of this meeting was on the performance of the plant".

The letter, signed by human resources manager Gwilym Hughes said: "The clear message received by the union representatives was that the group could not continue to support the losses sustained by the plant over the years.

We have a vested interest in keeping the plant open and we all need to work together to make this happen Company letter to workers

"Therefore the plant had one final chance in the next financial year, (commencing 01/10/04) to prove its viability by achieving budget or better.

"The performance will be monitored over the next three months and if the plant is on target, it would continue to operate. However failure to achieve budget in the first three months, would result in closure."

Workers were told that the company believed the "budget can be delivered but only with the help and support of all our people."

In 1999 700 jobs were saved after workers agreed to a pay cut

The letter went on: "Therefore over the next few weeks and months the management team and workforce representatives will continue to work together, focussing on areas of spend, production efficiencies and off standard working, to ensure we deliver the plan.

"Please ensure that you support it in any practical way - be it flexibility, suggestions, perseverance or patience.

"We have a vested interest in keeping the plant open and we all need to work together to make this happen."

The company said it had nothing to add to the statement given to workers.

In 1999, 700 jobs were saved at the plant after workers agreed to a pay cut.

They voted to cut overtime rates after they were told the plant may close.

Ms Thomas said two union representatives attended a European Works Council meeting with company directors in Germany last week, where they were told the plant had three months to hit its targets.

The AM and Llanelli MP Denzil Davies will meet shop stewards at her office in Llanelli on Friday, and she has also been in discussions with assembly Economic Development Minister Andrew Davies.