LONDON (AFP) - Jaguar is to halt production at a plant in Coventry, with the loss of 1,150 jobs, because of poor demand for the luxury brand, US parent company Ford announced.
Jaguar will also pull out of Formula One racing from the end of the current season, Ford said Friday.
Around 750 white collar workers and 400 production staff will lose their positions at the Browns Lane site but Ford said there would be no compulsory redundancies.
The site has been producing cars for more than 50 years and currently employs more than 2,000 workers. One of the most famous cars manufactured at the site was the E-type which became an icon of the 1960s.
Last month Ford cut production at the three British sites making Jaguar cars because of lacklustre sales, particularly in the United States.
Ford's Premier Automotive Group, which comprises Aston Martin, Jaguar and Land Rover, posted a 362 million-dollar loss in the second quarter.
"The fact is despite significant sales growth and excellent levels of quality in recent years, we have not been able to keep pace with significantly larger competitors," said Joe Greenwell, chairman and chief executive of Jaguar.
"We have too much capacity and this is our underlying structural problem. Our bottom line has further deteriorated this year with the weakness of the dollar and unprecedented incentives in the premium market."
Jaguar said Browns Lane would remain its headquarters, with around 350 staff.
Union leaders condemned the decision to pull the plug on production in Jaguar's hometown, warning it could sound the death knell for the luxury car manufacturer.
Derek Simpson, general secretary of the Amicus union, said: "Ford's decision may kill off Jaguar. Our members will fight like tigers to keep the lion's share of quality car manufacturing in Britain."
The unions warned the loss of hundreds of skilled jobs would have a devastating effect on the local economy.
Browns Lane, they said, had recently been identified as one of the top performing car plants in Europe and its closure would not resolve Jaguar's main problem, which was the need to increase sales.
Tony Woodley, general secretary of the Transport and General Workers Union, and Amicus's Simpson said they would provide leadership to workers to fight for their plants and jobs.
"We are not prepared to see British workers to be treated as cannon fodder to satisfy American shareholders," said Woodley.
"We will be consulting our members and giving them leadership to fight for their plants and jobs. It is also likely that we will be consulting with our members across Ford in the UK."
Jaguar, which traces its roots back to a motorcycle sidecar company set up in Blackpool, northwest England, in 1922, operates three production plants in Britain. It was bought by Ford in 1989.