The fate of thousands of jobs in Britain's beleaguered automotive industry hang in the balance this week as unions and US-owned car parts maker Visteon hold crunch talks over its future.

Visteon UK, which employs 2,500 people at plants in Essex, Halewood on Merseyside, Swansea and Belfast, has warned that if restructuring proposals are not accepted by unions the company faces administration and job losses.

Last week two days of negotiations with unions, including the Transport and General and Amicus, broke up with no agreement. The proposals include an overhaul of the company's final salary pension scheme, in deficit to the tune of £160m, a freeze on wages until 2008 and cuts in benefits.

Unions are demanding that the final salary pension scheme be continued and that none of the plants are closed down. Sources indicate that Visteon UK, led by managing director Steve Gawne, has made clear administration is the alternative to a deal. Last month he sent a letter to workers telling them the proposals represented the only way forward.

A union source said: 'There are meetings on Thursday and Friday. It looks as if they will be the vital ones.' Company sources said that last week's talks had been adjourned and that it was unlikely there would be a further adjournment at the end of next week.

Visteon was formerly part of Ford but was spun off in 2000. Its US management considered closing the UK operation last autumn but was persuaded not to by the British management. Ministers, including Northern Ireland Secretary Peter Hain, who has a south Wales seat close to the Swansea plant and whose government post covers the Belfast one, also lobbied for the UK arm to be saved.

Visteon has faced increasing competition from low-cost manufacturers in eastern Europe and Asia. In the US, several plants have been re-integrated into Ford.