Viasystems is involved in a particularly volatile market that has severely affected the productivity of its sites

Dr John Bridge, One NorthEast

The company plans to close its plant at Longbenton, with the loss of 525 jobs, and is shedding 325 staff at its site in South Shields.

Mr Byers, who is MP for Tyneside North, told the Newcastle Journal: "If they (Viasystems) failed to meet the terms, the government should enforce those conditions and have the money repaid."

Paul Nowak, regional secretary of the TUC, backed the call for the government grant to be scrutinised.

He said: "There may be a case for Viasystems to pay that money back, subject to the terms of the grant, and that should certainly be explored."

Viasystems, which makes printed circuit boards, blamed a continuing downturn in the market in the global electronics market for the job losses.

Meanwhile the regional development agency One North East is bringing together a task force, including local authorities and government agencies, to look at ways of reducing the impact of the job losses.

A "global downturn" is blamed for falling sales

The team hopes to give people the chance to find other jobs and have access to more training.

Dr John Bridge, chairman of One NorthEast , said: "The news that Viasystems is to reorganise, cutting its workforce by 850 is clearly a major blow.

"Our immediate concerns, of course, lie with those individuals and families affected.

"Viasystems is involved in a particularly volatile market that has severely affected the productivity of its sites.

'Best outcome'

"One NorthEast will be working with the company themselves and a number of regional partners to formulate a response that will result in the best possible outcome for all those affected."

A 90-day consultation period has begun with the AEEU union at both plants.

The union's general secretary Sir Ken Jackson described the news as a "huge blow" to the region.

He said: "These are more quality jobs slashed in the technical sector, which demonstrates just how difficult it is for manufacturers to survive.

"This is a good company with a worldwide reputation.

"If they cannot make a go of it thousands of others will not either."

Transferred ownership

Viasystems transferred ownership of the Tyneside plants to EPCBG in March 2000, licensing the sites to continue to trade as Viasystems.

Prior to Viasystems' ownership, the sites were owned by ISL and Plessey Circuits Limited.

In 1998 Viasystems was criticised for shedding 1,000 jobs at its Scottish factories.

The company once told its workers "the future's so bright, you'll have to wear sunglasses".