Business Editor Andy Richardson looks at the region’s runaway industrial powerhouse - vehicle manufacture.

COAL, steel, and shipbuilding made North-East businesses world famous. But the powerhouse industries that employ thousands are all gone - or are they?

The summer of 1986 is best remembered for Diego Maradona’s infamous ‘Hand of God’ goal that dumped Bobby Robson’s England out of the Mexico World Cup. But a month later a factory was opened which has become a catalyst for an industry which now supports more than 25,000 jobs.

When the first Bluebird came off the production line at Nissan Sunderland it was one of the few reasons to feel good about regional manufacturing which was being ravaged at that time by closures and job cuts on an epic scale.

Nissan Sunderland now makes a third of all the cars produced in Britain and employs 7,000 people.

But the region’s bid to become regarded a global force in the automotive sector is based on more than just Nissan.

Gestamp Tallent at Newton Aycliffe is part of Nissan’s supply chain, and also counts BMW, Ford, Jaguar, Porsche, Renault, Honda and VW among its clients. The manufacturer of car chassis components, which also has a site on Wearside, has reported record output and staff numbers in the last three years and turnover this year is expected to grow 16 per cent.

Nifco UK at Eaglescliffe, near Stockton makes about 25 million plastic parts a month, from door handles to cup holders, for almost every car that travels on UK roads. Each Qashqai that rolls out of Nissan's Sunderland plant contains about £50-worth of Nifco fixtures and fittings.

Redcar-based parts manufacturer ElringKlinger (GB) is on track to double its turnover to £26m and recently set out plans to expand its Redcar factory with a 4,000 sq m site extension to its existing site on Kirkleatham Business Park.

In January, Calsonic Kansei opened its fourth Wearside facility as part of a £4.5m investment programme. The firm, which supplies heat exchange, air-conditioning, exhaust, interior, and electronic automotive components, now employs 1,400 people in the region.

A total of 43 per cent of the total parts which make up a Nissan Qashqai are made by UK suppliers, most of them North-East based.

To build an even stronger supply chain the North East Automotive Alliance (NEAA) was launched last week, which brings together major names including Nissan, Nifco, Komatsu, Sevcon and Hyperdrive.

Prior to its launch, the NEAA carried out the first in depth research into the scale and importance of the automotive sector to the region. Some of the figures it unearthed are staggering.

The industry generates £7bn in sales for the North-East, is responsible for £5.1bn in exports and creates a £2.6bn trade surplus annually.

In the last five years, more than £1bn in regional investment has been made into 21 automotive projects in the North-East.

The sector directly employs 26,000 people and impacts on a further 141,000 jobs. Potentially, 10,000 additional jobs could be created in the next five to 10 years as. About 8,500 people in the industry are due to retire during that period, leaving skills gaps. This is one of the areas NEAA will be working to address, alongside understanding the region’s capabilities and gaps in the supply chain; carrying out benchmarking and sharing best practice, innovation and technology; and promoting the North-East’s automotive excellence to the global market.

Kevin Fitzpatrick, chair of NEAA and Nissan’s vice president for manufacturing in the UK

NECC Chief Executive, James Ramsbotham, said: “The automotive sector in the North-East is a genuine regional powerhouse and key driver of our economy.

“For every Nissan, Nifco, Caterpillar or Calsonic, there are multitudes of businesses fuelling an innovative, streamlined supply chain underpinning these giants of North East industry and helping maintain our positive balance of trade with our exemplary export record.

“At NECC, we are firm believers of the need for our region to speak with a united voice and work toward common goals and the North East Automotive Alliance does just that for this vitally important sector.”

Attracting new companies and jobs to the region, supporting business excellence and best practice and providing strategic leadership to grow the industry is at the heart of the NEAA’s mission. It will also provide benchmarking, help companies to boost efficiency and reduce costs, and work to increase the region’s competitiveness in this key sector.

The Sunderland-headquartered organisation has appointed cluster-management specialist Paul Butler as its chief executive. Mr Butler is the European Secretariat for Cluster Analysis, an organisation mandated by the European Commission to promote cluster management excellence, and he is the UK’s only benchmarking expert for the UK. Prior to his appointment Mr Butler spent almost a decade on the management team of one of Europe’s leading clusters, the North East Process Industry Cluster (Nepic).

He said: “In February last year, we had a meeting with key North-East automotive businesses and invited the North West Automotive Alliance across to talk to us. That meeting spurned an appetite within the sector to create our own cluster.

“Many regions across the EU are organised in such a way.

“A whole range of businesses and organisations have already signed up to the cluster from large manufacturers, tier-one suppliers to single-person suppliers, legal, financial, and academic organisations.

“People attending the launch event will be able to find out what the cluster is all about, how it can benefit their business and hopefully they will join too.”

Mike Matthews, managing director of Nifco UK and European operations officer, said: “The North East is growing an international reputation as an automotive hub, and with an OEM in Nissan here, the region’s potential still remains untapped.

“The NEAA will play a significant role in driving forward the development of a strong automotive sector in the North-East, which in turn will bolster the economy and create more jobs.”

Nissan’s Vice President for Manufacturing in the UK, Kevin Fitzpatrick, has been appointed to chair the NEAA. He said: “The sectors that benefit the most are the ones that work together. In the North-East the automotive sector needs one voice and at the moment it hasn’t.

“Our access to Europe is better than anywhere else in the UK. This is a global industry and the North-East supply base should be able to get more business than Nissan business.

Lawrence Davies is deputy chief executive at UKTI's Automotive Investment Organisation (AIO), the arm of Government tasked with promoting investment into the UK automotive sector, and a former director at General Motors.

He said: “The North-East has a strong, thriving automotive sector. The NEAA is therefore an important step forward in bringing together the key players in the sector to enhance the region's position and profile both at home and abroad. This is great news in further boosting the UK automotive success story.

“We at the AIO will work hard with the NEAA over the coming years, to promote UK automotive around the world and to support the region in securing further overseas investment. This will continue to be crucial in securing jobs and growth in the region."