A close-up of the Bridgend Ford Engine plant sign on June 5, 2019 in Bridgend, Wales. Union sources have said the engine plant in Bridgend will close in September 2020.

Ford has confirmed that its engine factory in Bridgend, Wales will close in September next year.

The U.S. firm said the decision was part of a business transformation to create more efficiency in its European operations. Ford specifically blamed the loss of a contract to supply Jaguar Land Rover with engines and a lack of demand for its 1.5 liter engines.

"Creating a strong and sustainable Ford business in Europe requires us to make some difficult decisions, including the need to scale our global engine manufacturing footprint to best serve our future vehicle portfolio," said Stuart Rowley, president, Ford of Europe in a statement confirming the move.

"We are committed to the U.K.; however, changing customer demand and cost disadvantages, plus an absence of additional engine models for Bridgend going forward make the plant economically unsustainable in the years ahead."

Ford expects to book charges of about $650 million in relation to the closure with about two-thirds of that figure being used for employee compensation.

Ford has been on the site since 1977 and the plant currently has around 1,700 employees.

The leader of the U.K.'s second largest union described Ford's decision as a "grotesque act of economic betrayal."

Unite general secretary Len McCluskey said his organization would fight the closure.

"These workers and this community have stayed faithful to Ford, as have U.K. customers — this is still Ford's largest European market — through thick and thin, but have been treated disgracefully in return by this company," he added.