SOLENOID manufacturer Mechetronics is in a stronger position today than at any time in its history.

Despite a move to smaller premises, a mile from its former site, and the loss of almost half its workforce, the future looks bright for the Bishop Auckland, County Durham, business.

Mitchell Wolfe, 43, is the Company's managing director. Along with technical director Jim Summerbell, he led a management buyout from former parent company Warner Electric in 1994, with financial backing from venture capital group 3i.

Mechetronics shared a site with Warner, in St Helen Auckland, County Durham, until Warner closed last March. Mr Wolfe said: "There are a number of people who did not believe we would still be here after ten years, following the closure of Warner Electric.

"I have to admit that there has been more than one occasion when things looked very bleak for the company.

"But the new factory on the South Church Enterprise Park represents an investment of more than £500,000, and shows our continued commitment to south-west Durham."

The move into the offices formerly occupied by Ohmega Electronics was backed by regional development agency One NorthEast, County Durham Development Company and Wear Valley District Council.

It also had the support of the workforce.

Mr Wolfe said: "The staff were tremendous. As a result of their support, we were able to move over a weekend and restart the machines at 9am on the Monday morning, without losing any production time.

"The new offices are smaller than we occupied at Warner, at 27,000sq ft, but they are cheaper to operate and are only 13 years old.

"They are also just a mile from our former offices. It was important for us to keep employment in this area and to be as close to the homes of our workforce."

Mr Wolfe, who lives in Bedale, North Yorkshire, believes the move has not only streamlined the company, but also put it in a better position to handle any adverse conditions in the future.

"The move did lead to job losses, and I regret that, but it was necessary for the continued existence of the company.

"Like anyone else, we could get hit by a bow wave at any time, but the position of the company now means we are better placed to right ourselves quickly.

"We have paid off all our debts, which amounted to millions, and currently operate at break even. It should not be long before we are recording profits.

"We now have cash in the bank, a position we haven't been in at any time in our history."

The move to smaller premises inevitably meant some operations had to be left behind. The company sub-contracts its press works and chemical blacking operations, but most of that work has gone elsewhere in County Durham, including Almet, in Newton Aycliffe.

Mr Wolfe said: "Our circumstances have hopefully helped to maintain employment, and even create jobs, at other County Durham companies."

Mechetronics' future strategy is based on the continued resilience of the company, and the expansion of a partnership in China.

Mr Wolfe said: "Our strategy has to be based on making the most of our facilities in County Durham and China.

"We cannot compete with the costs of producing solenoids in China, so we are currently building an operation there, in partnership with Freewood, known as Mechetronics Asia, which will help to maintain our County Durham operations.

"We can provide the facility with raw materials to make products for the Asian market, and vice versa. The Bishop Auckland facility now assembles parts manufactured at our Chinese facility.

"We are currently developing a product in China, designed in Germany, which should be worth more than £3m a year to this company."

That is a solid market for the company, which has a turnover of £5m a year.

Mr Wolfe also has an answer for the critics who might accuse him of moving jobs offshore to areas where it is cheaper to produce the products.

"If we had not started the relationship with Freewood in 1997 and established a base in China, Mechetronics would not be here now.

"A lot of this move has been forced by our customers. Consumers are forcing companies to source cheaper products and materials in China, because they refuse to pay British prices for them."

But Mr Wolfe believes the future of the Bishop Auckland facility is assured.

He said: "We aim to get this facility producing world class products, winning more and more customers overseas.

"While we will continue to produce the £1 solenoids for hydraulic and pneumatic systems, we hope to win customers in the £5 solenoid market, producing product for the higher value-added end of the market.

"Eventually we hope to produce two million solenoids a year, with one million made in Bishop Auckland and one million in China."