Spain has vowed to do everything possible to stop Nissan from closing its main car factory in Barcelona amid large protests.
More than 1,000 workers on Thursday took to the streets and burnt tyres in protest against the news.
The decision by Japan's Nissan Motor to shut the 3,000-worker plant from December is part of global cost cuts.
It is a blow for the eurozone's fourth-largest economy at a time when unemployment is rising and a recession looms because of the coronavirus crisis.
The government, which said in January after meeting officials from the Renault-Nissan alliance that jobs at the plant were "guaranteed", lamented the decision and urged Nissan to look at other options.
"We regret it and will do everything we can to overturn it," Foreign Minister Arancha Gonzalez Laya said.
The government could talk to other players about the plant and Spain has attractive assets for "any business willing to manufacture cars", Ms Laya said.
The main opposition party blamed the leftist coalition government for the closure and for failing the Nissan workers.
The Catalan regional government also urged Nissan to reconsider its decision and said it offered the car maker a €100 million (Dh406.9m/$110.7m) aid package to produce new models, but had received no answer.
The offer was in addition to the €25m in public aid Nissan received in the past 15 years from regional authorities, said Angels Chacon, Catalonia's top business official.
Nissan said it would slash its global production capacity by a fifth to help reduce its costs by ¥300 billion (Dh10.25bn/$2.79bn) as it looks to become smaller and more cost-efficient after posting its first loss in 11 years.
"There was no viable solution for the future of the Barcelona factory" because of low production, said the chairman of Nissan in Europe, Gianluca De Ficchy.
Two smaller Nissan plants in northern Spain will stay open.
The plant and the nearby facilities employ 3,000 workers and the closures could indirectly affect up to 25,000 jobs, unions say.
The car industry accounts for about 10 per cent of Spain's gross domestic product, according to producers association.
More than 1,000 masked workers blocked the area around Nissan's plant with a procession of vehicles, then by a burning pile of tyres at its entrance. They also cut off roads.
The closure would cost Nissan as much as €1bn, the government said.
It said that investing in the factory would be a cheaper alternative.
Car-making alliance partners Nissan, Renault and Mitsubishi said on Wednesday that they were reorganising global production to save costs and become more efficient.
Renault, which will now take the lead for the alliance in Europe, has two factories in Spain.
A spokesman for Renault in Spain declined to comment on the possibility of layoffs and said it would provide details on the future of its operations on Friday.
The Barcelona plant, which has been operating since the 1980s, mainly produces electric vans and pickup trucks and is Nissan's main European plant after one in Sunderland, England.
Renault is poised to announce 15,000 layoffs worldwide on Friday as it unveils a plan to boost its profitability and cope with faltering sales, a representative for the CFDT union said after meeting the company.
About 4,500 jobs will go in France, although largely through voluntary redundancy and a retirement scheme, the CFDT’s Franck Daout said.
The overall cuts would affect just under 10 per cent of Renault's 180,000 global workforce.