CRISIS in the Eurozone is having an effect on North-East manufacturing after an engine company cited the problems as the reason for cutting half of their temporary production staff.

Cummins Engine Company in Darlington has let 30 temporary workers go after a recent reduction in orders following the ongoing uncertainty over Greece's status in the Euro, and Spain's sovereign credit rating plunging to triple B after problems in its banking sector.

The company, which employs 710 people at their Yarm Road plant, has put the problems down to buying confidence being shaken as a result of the developments.

The temporary workers will finish at Cummins on Friday, June 29.

Orders at the engine company tends to increase when the construction and transport sectors are buoyant, as this often drives demand for new equipment.

Temporary workers are taken on by the company to help the cope with ebb and flow in demand for engines, which can often see a plethora of orders which need to be completed quickly.

The firm said production capacity was down to 155 engines a day for July - but this was a similar level to the start of the year.

Temporary staff represent 60 of the Darlington site's 340 production workers.

The Darlington plant, which opened in 1965, has been through many highs and lows recently, shedding 440 of its 1,000 workers in 2008 and drastically scaling back production from three shifts to one.

From 2009, the business implemented major changes to its working practices, invested millions of pounds in new machinery and recruited hundreds of staff to meet rising demand, producing its one millionth mid-range engine a year later.

In April, 120 staff joined on short-term contracts after the company won orders to build 7,000 truck and industrial vehicle engines for customers in Brazil and China.

A further 53 temporary workers joined during the year as production was stepped up at the Yarm Road factory to ensure orders were completed on time.

A better than expected forecast for the first quarter of 2012 saw that 91 of the 173 workers retained.

A spokeswoman for the company told The Northern Echo: "Due to the uncertain economic conditions in Europe, Cummins Darlington Engine Plant has seen some of its key customers affected, resulting in a recent reduction in orders.

"Unfortunately, due to this drop in demand, Cummins has had to make the decision to react in order to protect the business and ensure efficient operating going forwards.

"This means that Cummins will reduce the production capacity, to 155 engines a day for July, which will result in the release of 30 temporary employees on Friday, June 29.

"As always it is important that we continue our focus on improving safety, quality and efficiency performance and position the plant competitively in order to bid for future work, securing the success of Cummins Darlington."