It is not just the staff who work here, it is the local economy, local businesses - it is the whole knock-on effect

Graeme Slator, Viasystems employee

Chairman Dr John Bridge said: "The news that both Viasystems plants are to close, making 1,600 people redundant, is devastating news for its employees, their families and the region.

"Since Viasystem's earlier announcement that it was making up to 900 people redundant, we have been working with our partners and the company to secure a rescue package. Sadly this has now failed."

The company initially announced on 3 September that 900 jobs were to go at its factories in Longbenton and South Shields.

On Thursday the company announced it had called in the receivers, threatening a further 700 jobs.

'Knock-on effect'

Graeme Slator, 38, a shop steward and process operator at Viasystems said the announcement would have far-reaching effects.

"This will shatter the local economy. It is not just the staff who work here, it is the local economy, local businesses - it is the whole knock-on effect.

We will be arranging meetings with local MP's and councillors to see if there is any way they can assist both locally and by national government

Mel Barras, AEEU

Councillor Paul Waggott said the job losses would hit South Tyneside hard, when it was still reeling from the closure of the Cammell Laird shipyard just a few miles along the Tyne.

"We know the majority of those losing their jobs live in South Tyneside, most in South Shields.

"It will therefore be a particularly harsh blow for many families and businesses in this town."

Cllr Waggott pledged the council's full support to the receiver to find a buyer and Dr Bridge said One NorthEast had set up a response group to discuss the way forward.

'Full co-operation

Union officials are hopeful that jobs can be saved if a new buyer is found for the plant in the next four weeks.

Mel Barras, regional officer for AEEU said, the receivers had suggested that it could be sold as a going concern.

He said: "We, as the recognised trade union at Viasystems, will be giving them our full co-operation to achieve this aim.

"We will be arranging meetings with local MPs and councillors to see if there is any way they can assist both locally and by national government."

Viasystems has two factories in north-east England

David Webster, chairman of European PCB Group which has owned Viasystems since March 2000, said the company was "deeply saddened" by the announcement.

"Over the last 18 months we embarked on an aggressive investment programme to make our PCB manufacturing facilities the finest and most technologically competent in the world.

"While we believe our programme was successful, with little or no demand for our core products, it was no longer prudent to continue our operations.

Since the redundancy announcement was made there have been calls for Viasystems to pay back �17m of government aid designed to encourage investment in the north-east of England.

A spokeswoman for The Department of Trade and Industry said: "Following the request to call in the receivers, the Government has begun action to recover the aid granted to Viasystems' Tyneside operations because of our responsibilities to the taxpayer."