Two decades ago, foreign companies were hailed as the saviour of the North-East but, 20 years on, many of the promises made by those firms have come to nothing. Business Correspondent Paul Willis reports.

THE depressing round of closures of pits, shipyards and steelworks that followed the Second World War cast a long shadow over business in the North-East.

But by the 1970s, the region had found an unlikely saviour as Japanese companies appeared on the horizon looking for overseas investment.

NSK paved the way in 1976, becoming the first Japanese investor in the North-East when it opened its bearings factory in Peterlee, County Durham, employing many men put out of work by the closure of most of the collieries in the south-east corner of the Durham coalfield.

Their arrival led other companies from the so-called sunrise industries to beat a path to the region.

By the 1980s, the North-East was by far the most successful region of Britain in attracting investors, not only from Japan, but from the Far East in general.

With the arrival of blue-chip multi-nationals such as Sanyo, Nissan, Fujitsu, Samsung and Siemens, the region had become a fully-paid up member of the global economy.

However, within only 20 years, most of those companies have left, taking the jobs with them.

According to research by the University of Newcastle's business school, new plants promised more than 50,000 jobs for the region.

By 1999, more than a third of those jobs had still not materialised.

The business school's report does not name companies, but suggests some foreign companies were guiltly of deliberately exaggerating the number of jobs they planned to create.

Although it is impossible to say whether companies over-egged job claims on purpose, it cannot be denied that there has been a massive shortfall between the promises and the reality.

Within the past decade, Fujitsu, Samsung, Sanyo and Siemens have all pulled the plug on their North-East operations.

Only Nissan remains as a regional success story.

What is more, the blue-chip invasion came at a price, if not to the North-East, then to the UK as a whole.

Nissan is the most successful car plant in Europe and its presence in the region has created thousands of jobs at its factory and in the automotive sector surrounding it.

However, the factory's success has been sustained by £170m of government funding.

Large-scale foreign investors have been lured to the region with the promise of grants from regional development agencies such as One NorthEast. German company Siemens was promised a £44m Regional Selective Assistance grant to set up its semiconductor plant on North Tyneside.

When the plant closed, the company had received £18m - money it was expected to pay back for breaking its promises.

But Ian Williams, head of business investment and finance at One NorthEast, said regional development agencies had to balance their duty as public bodies with the risks of business.

Mr Williams said: "Business is always a gamble, but we have a responsibility to bring investment and jobs to the region.

Unfortunately, no-one, not even the companies themselves, can predict how the world economy will develop. There are success stories and there are failures.

"Having said that, we are extremely careful about how we invest our money and if you look at the figures, 85 per cent of the grants we provide go to UK businesses."

In the case of the sunrise industries - with the notable exception of Nissan - the gamble has not paid off, and it is North-East workers who have paid the heaviest price.