Car giant Nissan is to axe 1,200 jobs in the wake of the economic slowdown which has hit the motor industry hard and led to sales slumping, the car giant announced today.
The jobs will go at the firm's plant in Sunderland, which employs around 5,000 workers and is one of the most long-established and biggest employers in the North East.
Shifts will be cut and 1,200 jobs axed, including 400 staff on temporary contracts.
The cuts follow increasing pleas from the motor industry for Government action to boost the availability of credit for consumers as well as firms.
Figures yesterday showed car sales continuing to fall, down to the lowest levels in more than a decade.
Nissan sold 66,336 new cars in the UK in 2008 - only 0.14 per cent fewer than in 2007. This was a much better performance than the national average which saw new car sales slump 11.3 per cent in 2008.
However, Nissan sales for December 2008 fell 26.68 per cent compared with the same month in 2007. This compared with a national decline of 21.2 per cent.
The Sunderland plant is the biggest car factory in the UK and the most productive in Europe.
Trevor Mann, Nissan's senior vice president for manufacturing, Europe, said: "Like all manufacturers, Sunderland plant is currently operating in extraordinary circumstances not of our making. It is essential we take the right action now to ensure we are in a strong and viable position once business conditions return to normal.
"Unavoidably, this means we have had to make some very tough decisions in recent weeks. However by doing so, we are helping to safeguard our long term future which I believe is extremely positive.
"We will begin preparations to launch another new model in 2010, which will be our sixth in seven years. This level of new model introduction is unparalleled in plants across Europe and demonstrates the confidence Nissan's top management has in the Sunderland workforce.
"The long-term future of the plant must remain our over-riding priority. However, as always, Nissan will continue to make every effort to minimise the impact on its employees and their families."
Derek Simpson, joint general secretary of the Unite union, said: "This is devastating news for the workers and their families. Today's announcement shows just how serious Britain's economic difficulties are.
"Unite will be doing everything possible to minimise compulsory redundancies and it is absolutely crucial that these workers' skills are not lost.
"The economy will improve and when it does Nissan will need these workers' skills again.
"The Government must support these workers through opportunities to re-train or to develop their skills.
"I hope the lessons of Rover have been learnt. In 2005, thousands lost their jobs, most of them were forced to abandon manufacturing and take a pay cut just to stay in work. It is imperative that we protect our skills base, otherwise Britain will come out of recession considerably weaker.
"There is no doubt that 2009 is going to be a harsh year. Gordon Brown must continue to do what it takes to stimulate the economy and get people spending again.
"These job cuts lay bare the human cost of the credit crunch. It beggars belief that the Tories would rather cut spending just when people need real help."
Unite is pressing for a £13 billion strategic support package for manufacturing from the Government, similar to support provided by the German, French and Swedish governments to their manufacturing sector.
Nissan workers only returned to the production line on Monday after an extended Christmas shutdown in response to the slowdown in sales.
The factory was closed over Christmas, with production ending on December 18, five days earlier than expected, after a surprise shutdown the previous week.
Nissan said the outlook for the car market this year remained "extremely challenging", adding that it was committed to taking the right action now to safeguard the plant's long-term sustainability.
The company announced that one shift will be cut from the Sunderland plant's two production lines until March, with one being reinstated in April.
Nissan described the cuts as "decisive action" aimed at protecting the long-term viability of the Sunderland plant.
The company said there had been a "dramatic decline" in customer demand towards the end of 2008 which had affected all car-makers.
A number of measures had already been put in place to reduce productivity, including training days and a slowing down of the production lines.
Business Secretary Lord Mandelson said: "I appreciate that this will be a tough time for workers."
The Government will work with regional development agency One NorthEast to help workers find new jobs as quickly as possible, he said.
"We will also be working with Nissan to secure new investment for Sunderland and to make sure that the UK is best placed for the upturn and re-creation of jobs as the economy improves.
"This is a highly skilled workforce that has many of the skills that UK and worldwide industry will need as conditions globally improve.
"We also need to look to the future and our commitment to the development of low-carbon vehicles as an integral part of the UK automotive industry.
"As part of that aim I want to visit the plant as soon as possible to start work with Nissan on plans to bring manufacture of Nissan's new family of electric vehicles to Sunderland."
A year ago this month Nissan announced that it was creating 800 jobs in Sunderland in response to demand for its Qashqai model.
A third production shift was added at the plant, which first started building cars in 1986.
* The job cuts were announced on the day Nissan unveiled a new £107,000 luxury sports car in Japan, showing off a souped up version of its GT-R sports car which it said was a bargain compared with European rivals.