A GLOBAL car components business said last night it is to merge two North-East factories in a cost-cutting measure.

But TRW, which has plants in Peterlee and Houghton-le-Spring, County Durham, said that for now it would retain all 600 staff.

A spokeswoman said: "At the present time, we need both sets of management with expertise in the different areas to help carry on production."

But she declined to comment on the possibility of future redundancies.

TRW Automotive Holdings is consolidating its UK safety electronics operation at Houghton-le-Spring with its seatbelt and airbag manufacturing plant in Peterlee.

The safety electronics plant manufactures air bag sensors and other in-car sensors and is a growth area for the business.

The merged TRW plant will be on the site of the Peterlee Mill Hill plant, which has excess capacity.

TRW, based in Michigan, US, will start the merger of the factories at the end of this year. Workers were told about the plans last night.

Operations manager at Houghton-le-Spring Phil Pearce said: "We have undertaken a review of our operations to establish how to reduce operating costs.

"The consolidation of both the seatbelt, airbag manufacturing and safety electronic operations, which are about ten miles apart, will enable the business to improve its operational efficiency."

Trevor Cairns, operations manager at the Mill Hill plant, said: "This consolidation will give us the opportunity to strengthen our position and plan for future growth.

"Our investment in the Mill Hill facility, the local community and our combined workforce will continue and we will maintain our leadership role in supplying vehicle occupant protection systems."

TRW's third North-East plant, its steering components plant, will remain at Houghton-le-Spring.