A car pressings firm, which plans 106 job losses in Powys has told unions that work will move to Shropshire.
Stadco said after meeting assembly government officials, politicians and unions, that some jobs may transfer.
The announcement came as Toyota suspended work on a £88m new production line at its Flintshire engine plant as new car sales continued to fall.
Meanwhile, workers at a car parts factory in Swansea where 208 jobs are threatened have held a public meeting.
Stadco held talks with the Welsh assembly government, local politicians, a union and councillors on Tuesday.
It proposes transferring work to a factory in Shrewsbury.
It said it would not make any compulsory redundancies before March 2009, adding that some workers in Powys may be offered work in Shrewsbury, a 45-minutre drive away.
NEW CAR SALES IN WALES
Year to date - 83,633 (to end of November 2007)
Year to date - 74,716 (to end of Nov 2008), down 10.6%
November 2007 sales - 5,346
November 2008 sales - 3,475, down 35%
GB November sales - 157,890, down 36.7%
Source: New car registrations, Society of Motor Manufacturers and Traders
Montgomeryshire AM Mick Bates was at Tuesday's meeting, and said the company wanted to keep the Llanfyllin plant open despite wanting to make two-thirds of its workforce there redundant.
He said: "I am pleased that managing directors within Stadco have confirmed that the plant in Llanfyllin will be retained.
"Around 60% of the workforce at Stadco lives within a five-mile radius, so the impact of these job losses on the local economy would be disastrous."
Local Conservative politician Glyn Davies said the talks with Stadco were constructive.
"The loss of 106 jobs in Llanfyllin will be a terrible blow to the town. It will really knock the wind out of the local economy. Our aim this morning was to seek to lessen the blow as far as it is possible," he said.
A Stadco spokesman said the meeting was "very productive".
Professor Garel Rhys on the problems facing the car industry
"Transferring the work to Stadco's main plant in Shrewsbury is one of a number of proposals we are looking at."
The Welsh Assembly Government has been asked to comment.
Meanwhile, workers from other firms facing job cuts in south Wales, including Hoover and Borg Warner, were invited to attend the Linamar meeting in Swansea on Tuesday evening.
The company, which employs about 350, announced this month it was looking for staff to take voluntary redundancy.
Speaking before the meeting, Rob Williams, factory convenor at Linamar, said: "It's a chance for everyone to get together and send out a message to Linamar that they will fight this."
Union leaders are set to meet with management on Wednesday morning.
Mr Williams said they were still hopeful that jobs could be saved.
Meanwhile, Toyota's production of a new petrol engine for its Auris model was due to begin next September.
But the firm says it was halting installation work on a new production line at the Deeside engine plant while it carries out a review of all investment decisions.
The Society for Motor Manufacturers and Traders (SMMT) said new car registrations had fallen by 35% in Wales in November - compared to the same period last year.
The year to date totals also saw a 10.6% drop on 2007.
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