MORE than half the workforce at a North-East engineering company has been laid off in the third round of redundancies in two years.

Harkers Engineering Ltd yesterday confirmed that 54 employees at its Stockton site have been affected.

At its peak in 2003, the firm, which supplies components to Airbus and Rolls Royce, employed 250 staff. The latest job losses have reduced the workforce to 52.

Harkers is laying off the staff after deciding to axe production of land-based gas turbine casings, which it has supplied to power generation companies across the world for the past 20 years.

A company spokesperson said: "Harkers was a major supplier in the power generation industry, but the demand and market has declined rapidly."

He blamed the closure on a domino effect caused by the 2001 collapse of US energy group Enron. He said the firm will continue its successful manufacturing and assembly operations for the aerospace and defence sectors.

It is supplying wing components for the world's biggest commercial passenger plane, the Airbus A380, in a deal worth an estimated £5.4m a year.

A spokesman for the Amicus union, which represents the workers, said: "It is extremely sad. Unfortunately, the gas turbine work they did has dried up. We hold out hope for the other half of the company."

Harkers had undergone four weeks of consultation before individuals were informed of the recent redundancies. All those affected are expected to leave the company within the next 12 weeks.

Andrew Sugden, policy director for the North East Chamber of Commerce, said: "It is disappointing to hear of any business having to make redundancies and it is particularly distressing for the people involved. As some consolation the aerospace division seems to be holding its own and we are receiving buoyant messages from businesses in the Tees Valley and around the North-East that recruitment levels are relatively strong.

"Businesses are crying out for skilled technicians and, hopefully, the 54 people facing redundancy will move onto new careers relatively quickly."

Stockton South MP Dari Taylor said she was disappointed with the news.

"Anything I can do to help I will," she said. "I believe an urgent meeting between Harkers and Regional Development Agency One NorthEast is crucial now to see how things can move forward."

Stockton Borough Council leader, Bob Gibson, said he was sad to hear of the redundancies, but praised Harkers as a high-class engineering firm with a good reputation both nationally and internationally.