Workers at Unipart in Cowley fear their jobs may be on the line when the company loses its Rover contract in February.

And their 70 colleagues at the group's Automotive Components site on Woodstock Road, Oxford, are looking for new jobs as the company will be moving out of the plant before the end of the year.

Unipart now hopes to transfer staff to other manufacturing operations within the group. Early retirement and voluntary redundancy options are also being considered.

Workers were hoping to move to Unipart Yutaka Systems' new factory in Cowley, but Unipart has sold its share of that to Honda.

Unipart said: "We are not announcing anything at this time. February is a long way away."

It added: "The haemorrhage in the share value reflects what was going on throughout the industry last year. The conditions saw one of our competitors, Finelist, go under."

Two years ago, Unipart bought Partco parts company for £179m, but it has performed disastrously in the poor climate of the automotive industry since then. On April 30, chief executive John Neill will hold an extraordinary general meeting of shareholders to seek permission to maintain borrowings of £260m. Unipart added: "Because of the total worth of shares has decreased, we need this go-ahead.

"It says much for the strength of the company that we can take a £150m hit, as we have done with Partco, and still have borrowing capability."

Unipart's share price has tumbled to just 42p, down from 108p last year. About 2,000 of the 10,000 Unipart employees hold shares in the company. Between them they own 55 per cent of the business.

John Neill, a pioneer of the concept of worker stakeholders, has written to shareholders. He said: "In the light of Partco's extremely poor trading performance in 2000 it has been decided to write off the remaining goodwill arising on the acquisition, amounting to £156m."

The company said: "We have plenty of contracts other than Rover. We supply Jaguar, which has increased production to 200,000 units.

"Apart from supplying Vodafone, and contracts in the health and rail sector, we are negotiating a commercially sensitive new contract."

Automotive Components' Woodstock Road site has been sold for housing for millions of pounds.