A solenoid manufacturer already struggling following the closure of a neighbouring plant has suffered another jobs blow.

Mechetronics was affected by the closure of Warner Electric because the companies shared the cost of two outlets in St Helen Auckland, County Durham.

Warner announced in March it was closing its operations with the loss of 70 jobs, and Mechetronics said the move would cost it 21 staff.

The Northern Echo has learned that the situation has since worsened, with a further 19 workers due to be laid off.

But there was some hope for the remaining 78-strong workforce as Mechetronics made a commitment to the future.

The company has secured a £110,000 regional selective assistance grant to buy the former Ohmega Electronics building on the South Church Enterprise Park, near Bishop Auckland.

Ohmega was another company to suffer at the hands of harsh trading conditions for the manufacturing sector when it went into receivership in March, with the loss of 70 jobs.

Brian McDonald, of the Amicus union, said: "The fact they are buying the building, not leasing it, gives me hope. That they are investing suggests they will be there in the long term and hopefully progress not regress."

Mechetronics was always likely to suffer during the global economic downturn.

The company produces solenoids for cash machines, antilock braking systems for HGVs and coin mechanisms for vending machines. Orders are liable to dry up when companies cut back on buying new machines.

The company has nearly halved in size from the 136 it employed 18 months ago and staffing levels are well below its heyday of a decade ago when more than 300 people worked there.

Dianne Sharp, director at Mechetronics, said: "Times like this are always difficult. We are trying to secure the long-term future of this business. That is what this move is aimed to do."

The company will struggle to rebuild confidence among its workforce.

One disillusioned staff member, who asked not to be named, said: "The management here have long since lost the desire to see people in employment, even though those that are left here have devoted most, if not all of their working lives to this firm."