Electrolux, the world’s biggest home appliance's maker, is to close an oven factory in the North East that employs 500 people.

In a blow to a region that has already been routed by factory closures, the Swedish manufacturer said that it would move some of the production from the Spennymoor plant to Poland.

“Following a thorough investigation about the future viability of production at the factory in Spennymoor, Electrolux has decided to discontinue production at the plant,” the company said in a statement.

“Today the factory generates a loss. Running such a factory is not sustainable, which is why we have decided to consolidate our UK cooker manufacturing into our factory in Swidnica in Poland,” Electrolux said.

The company began a review of operations in October after saying that its factory on the Merrington Lane Industrial Estate, in Spennymoor, County Durham, had been affected by "intense global competition and falling prices".

The company's on-site distribution warehouse, which employs 40 people, has been unaffected by the review and will remain operational regardless of the outcome.

Closure of the cooker plant is the latest devastating blow to hit an area that has seen thousands of jobs lost as multinationals, including Black and Decker, Rothmans and Sanyo, moved production overseas.

Unions were bitterly disappointed at the move as they had argued that production could have been retained at the factory, after some restructuring, which would have saved at least half of the 500 jobs.

Shop stewards from Unite said that typically for every job lost at plants such as Electrolux, there were a further four in the supply chain that could be affected.

Production at the factory is expected to continue throughout 2008. Electrolux will take a charge of Skr390 million (£29 million) for the factory closure.

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