As Ford takes a hard look at its European car business, BBC Industry Correspondent Stephen Evans asks what the future holds for the Dagenham plant in the UK.

In broad terms, Ford's problem is simple - it has too much factory for too few sales.

So Ford of Europe's chairman, Nick Scheele, has come up with what he calls a "transformation strategy" aimed at turning 1999's profits of £28m into something approaching the £193m the company made in Europe the year before.

There are many reasons for the 7,000 people who work at the complex of plants on the Thames downstream from London to be worried.

The strong pound - at its highest against the deutschmark for a decade - makes British exports more expensive. Dagenham has not managed to meet its "schedules" - hit its targets - in the past year.

On top of that, there are currently 200 separate disputes on the go there.

Ford has just been involved in a series of wildcat strikes over racism which concluded with the company's global president, Jac Nasser, having to fly in from Detroit to bang heads together.

Now Ford's designers, computer experts and office workers have just voted to strike. That is making the bosses in America even less keen on the British operation, particularly as the unions have been diligently alerting the Wall Street Journal to every development in their strike plans so Ford executives can choke over their waffles in the morning.

So it ought to look bleak. In fact, it's not as bad as it's painted. It is true that while a year ago, Dagenham would have been completely out of the frame for closure, now some of its managers think it's a candidate.

But against that, Ford has just promised large sums of money for investment there. It remains a much improved site in terms of productivity.

The likely outcome is a squeeze on Dagenham and on the firms that supply it.

The prime candidates for closure remain two plants in Belgium - though Dagenham would come increasingly under threat if the pound stayed high or rose higher.

The desperate talk of closure, though, suits both the management at Ford and even, strangely enough, some of the unions.

Clearly people running a global company in a highly competitive market find it easier to extract change from a workforce if the workers think their jobs are under threat.

That's what wrought so much of the change in Britain in the 1980s and early 1990s.

Co-operation is necessary

But some of the union leaders also despair of Dagenham. Firstly, unofficial strikes indicate a union which can't quite keep a grip on its own members.

Secondly, British union officials increasingly recognise that a measure of co-operation with management is necessary if firms are to survive and prosper - and the atmosphere in Dagenham is currently not good.

But the difficulty for unions and management is that putting a squeeze on workers in jobs where they've already been squeezed and which are extremely repetitive and boring may worsen the atmosphere more.

They would be in a malign circle, with discontent and poor performance feeding each other - and that would increase the risk to the 7,000 jobs on the Thames.