German help may come at a cost

Federal Mogul Burscheld, the Rhineland subsidiary of the US group which owns the Sunderland plant, is the only party to put an offer on the table, despite 25 expressions of interest.

The piston ring manufacturer went into administration in January, and has been fighting to find a buyer ever since, despite having an order book of £18m.

Simon Appell, partner in administrators Kroll Buchler Philips (KBP), said: "Effectively the business needed a large investment to survive, and that wasn't possible.

"The German operation has put an offer on the table, but the deal isn't signed yet. We expect to be able to make an announcement within the next few weeks.

"If the deal does go through, then the business will be wound down over the next six to seven months, before plant and machinery are transferred to the German operation.

"While the news isn't good for the 400 workers at the plant, the fact that the business is being bought means there should be enough to ensure the workforce get more than just statutory redundancy pay."

Mr Appell said he didn't anticipate any further offers for the business, as the bid process had already been extended.

The North-East operation is paying the price for Federal Mogul's rapid global expansion in the early 1990s.

The parent company in the US is currently under Chapter 11 bankruptcy protection.

Sunderland is acting as host to the fifth International Automotive Conference, which ends today. It has delegates from international car manufacturers, including Ford, Vauxhall, Peugeot, Toyota, Honda and Volkswagen.

The euro's impact on car manufacture in the UK has been one of the topics of conversation at the conference.

Today, John Cushnaghan, managing director of Nissan UK and an enthusiastic supporter of the single currency is due to address the final session of the conference.

He is expected to outline how the introduction of the euro has affected the Japanese manufacturer's operations.