More than 200 jobs are to be axed in Shropshire with the closure of one of the county’s biggest manufacturing plants, it was announced today.

Defence giant BAE Systems is to close three factories, including its site in Telford, with the total loss of 500 jobs, partly because of the withdrawal of British troops from Iraq.

The sites are at Hadley Castle, Leeds, and Guildford, Surrey.

They are in the firm’s Global Combat Systems (GCS) vehicles and weapons businesses, which employ 1,820 people in the UK.

News of the closures was broken to staff in Telford, where 224 people work, this morning. One employee, who declined to be named, said: “We were just stunned.”

Company spokesman Mike Sweeney said: “One hundred roles will be transferred from Telford, Guildford and Leeds to our sites in Leicester and Newcastle but, realistically, it has to be admitted not many people will either want to make the switch or have the necessary skills. It is a very sad day.”

Mr Sweeney said the company had been hit hard by a fall in orders and a big blow came when the Ministry of Defence postponed a £16 billion utility vehicle programme the company was to bid for.

Kate Roberts, for BAE in Telford, said the plant would close in the summer of next year, as it was still working on several orders.

A further 50 jobs will be lost at Newcastle upon Tyne, seven in Leicester and 90 in the firm’s weapons business in Barrow.

Tory MP for The Wrekin Mark Pritchard said: “I am saddened such a dedicated group of people will be losing their jobs.”

Meanwhile, US car giant Chrysler is to file for bankruptcy after talks on its future broke down.

Chrysler, America’s third largest car maker, has until the end of today to stave off collapse.

By Simon Hardy