Colchester firm Paxman Diesels could be swallowed up by a rival company.

Bosses at Alstom, parent company of the Hythe Hill firm, quickly insisted the planned sell-off -revealed by This Is Essex on Thursday -would help ensure the long-term security of its workers there.

The firm last night confirmed its intentions to jettison its three engine production plants in Britain along with others abroad.

John Branscombe, managing director of the Colchester operation, said the firm might not be sold but consolidated with current European rivals.

"One thing is for sure, we have to have a change and get stronger."

He said the diesel market was "instensely competitive" and currently dominated by huge firms such as Caterpillar.

But he insisted: "We are keeping our head up and doing better than some."

Mr Branscombe said he was sure the company would do better if it was part of a larger diesels group rather than standing alone.

Alstom spokesman Brian Bennett said the move followed intense pressure from "bigger players" in the market.

He added: "The idea is that we dispose of the operation to a business which is better placed to secure its long-term future."

The engines market was currently in a "difficult" climate and was being dominated by several "huge players".

Mr Bennett said deadline date for the sell-off was April 2000 and said he could not predict any changes to the workforce which could occur after this time.

"I think the workforce would have a more secure future if the operation was placed with a clearly established firm in the field. It is still an excellent business," he added.

Paxman's is one of Colchester's biggest employers with a workforce around 380. In its heyday it employed 2,500 but had laid workers off in recent years.

Colchester MP Bob Russell said he was due to hold face-to-face talks with Paxman bosses this afternoon about the proposed deal.

He added: "I am hoping if the parent company is reassembling its range of products it does not mean the workforce or the factory will be lost."

"I will be asking for reassurances and I am hoping for the best."

The firm specialises in manufacturing diesel engines for rail, marine and power generation use.

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