Ford scales back Bridgend engine plant investment
Ford is to cut the level of investment and will halve the production of its new generation of petrol engines at its factory in Bridgend.
The American car firm said it would reduce from a planned £181m to £100m.
It did not plan job losses among the 1,850 workforce and said it still had a "substantial commitment" to the plant.
But the Unite union said it was "deeply concerning and must raise serious questions over Ford's long term commitment to Bridgend".
Production on the engines is due to start in 2018, with plans to build 250,000 new engines.
The decision to scale back comes nearly a year after the deal was announced, with the then economy minister saying it would "safeguard more than 750 skilled Welsh jobs for many years".
The investment - which was won against competition from Ford plants in Germany, Spain and Romania - was backed by nearly £15m from the Welsh Government.
Ford has now told workers and unions that the investment will be cut to £100m with only 125,000 engines being built.
It will now need 550 workers rather than the anticipated 750 for the new line but said workers would be redeployed in the plant.
"Due to the success of our other advanced-technology engines - including the 1.0-litre EcoBoost petrol engine - and anticipated changes in demand in Europe and other markets, we now expect the global volume of the new engines not to be as high as originally planned," said a spokesman.
It said Bridgend's "flexible manufacturing capability" meant it could adjust rapidly to changing market conditions, "scaling production up or down to meet future changes in demand as required".
But Unite Wales secretary Andy Richards said: "The halving of production of the new Dragon engine combined with pre-planned reductions in other volumes on-site places the plant in a very dangerous situation.
"Strategic decisions such as these are not made overnight.
"It is Unite's view that this is all part of a long-term restructuring plan across Ford's global operations in which its Bridgend operations are to be slowly dismantled."
He said Unite had been raising concerns with Welsh Government ministers for a number of years and they had been very supportive in trying to secure a long-term future for Ford Bridgend.
"Today's decision will have been made by its board in Detroit and that is where urgent questions must be raised as to the company's long-term commitment to its UK operations and its loyal and world class workforce here," added Mr Richards.
The union met with Ford officials and the Welsh Government on Tuesday.
Economy Secretary Ken Skates said there were global demand issues behind the decision.
He said it was essential the Welsh Government continued to work to secure jobs for the long term at the plant.
Welsh Conservative leader Andrew RT Davies, said: "At this stage it is reassuring that no job losses are planned but clarity and longer-term assurances must be provided to the workforce that this announcement will not affect Ford's commitment to the area."
The Bridgend plant opened in 1980 and has fought fierce competition to win successive investments in the past worth more than £2.8bn.
It currently makes 250,000 engines a year for Jaguar Land Rover but that will end in 2018.
The new Dragon engines will be made for Ford vehicles assembled outside of the UK.