JOB losses at NSK may be the beginning of an unprecedented period of bloodletting among the region's automotive component suppliers.

Details setting out the full extent of the cuts are expected today at one of the Japanese firm's two steering column plants, in Peterlee, County Durham.

The workforce there fear that as many as 150-plus jobs could go in the coming months.

The supply industry, which largely sprang up to serve the Nissan plant, in Sunderland, employs more than 20,000 people in the North-East.

But Nissan's determination to drive down its cost base could see that figure shrink dramatically.

The strength of the pound is forcing the Japanese to source more components from mainland Europe, where they can be made much cheaper.

At a meeting with key suppliers last year, Nissan said it needed cost reductions of up to 39 per cent.

Plant managing director John Cushnaghan warned that only the fittest would survive.

Just over a year ago, it chose the eve of the British Motor Show to warn parts suppliers that in future it would look to overseas manufacturers instead.

Mr Cushnaghan predicted that the group's procurement budget would match its sales profile - currently more than 70 per cent in the euro-zone.

Anxious not to be too dependent on Nissan's patronage, many North-East component suppliers have sought and won contracts with other motor manufacturers.

Among its clients NSK numbers Daimler-Chrysler, Volkswagen and Toyota. Indeed, it is currently investing £11m at a separate facility in Peterlee that will make bearings for Volkswagen, creating 52 jobs.

But the drive to cut costs is sweeping across the whole industry. Threatened by global over-capacity, every motor manufacturer is looking for new ways of making cars cheaper.

At the moment, British-based parts manufacturers are looking particularly vulnerable.

Nissan's alliance with Renault gave company bosses a glimpse of the savings that could be made by switching contracts to Europe.

Former Renault man Carlos Ghosn, installed at Nissan to stem massive losses, has already demonstrated a hard nose for business, closing factories in Japan and making thousands redundant.

Discomfort among UK suppliers increased when he invited French component manufacturer Valeo to Japan and voiced concerns that the group was paying too much for its parts.

Now, those fears seem to be coming true.

The extent to which Sterling is hurting the British operation was revealed yesterday when it reported a pre-tax loss of more than £17.5m, reversing profits of nearly £20m in 1999 - despite a backdrop of increased sales, up 14 per cent to £2.07bn.

Sunderland has already secured the next Micra - and the new Primera goes on sale shortly - but, unless the problem with Sterling can be overcome, the next generation Almera could still go to Europe