NSK Steering Systems Europe is transferring part of its manufacturing operations from Coventry to the North-East.

The transfer will create 138 new jobs in Peterlee, whilst putting 260 jobs at risk in Coventry.

However, non-production activities, including sales, engineering, purchasing and other corporate functions will remain in Coventry.

The transfer of operations is due to be completed by March 2003.

The move follows a major review of NSSE's manufacturing operations, which has already led to the closure of the Palmer Road plant in Peterlee with the transfer of some lines to the nearby Doxford Drive plant.

Alternative positions are being made available for 129 of the 160-strong workforce at the Palmer Road plant.

The overall consequence of the announcements is that a net 107 new jobs will be created within the steering systems business.

Damian Pearce, human resources manager at NSK, said: "It is very regrettable that we must discontinue manufacturing operations in Coventry.

"We will be doing all that we can to help those adversely affected by the decision. "However, the selection of Peterlee as the base for our UK manufacturing operations demonstrates our commitment to the North-East."

When the restructuring is complete, the Peterlee operation will be the only NSSE plant in the UK and will employ 350 staff."

NSK's other sites in Peterlee, at Brindley Road and Davey Drive, part of the NSK Bearings Europe business, are unaffected by the recent restructuring announcements.