German engineering firm, ElringKlinger has signed a GBP10m deal with the US-based automaker, General Motors (GM), to supply the made-to-order vehicle parts.
The firm has installed a new assembly line of worth GBP1.5m at the Redcar plant that is expected to have production capacity of about 500,000 parts per year.
Production of parts under the five year agreement is expected to start in 2013.
ElringKlinger managing director Ian Malcolm said that the introduction of these new processes and advanced assembly lines take the business to the next level and will result in higher quality robust designs and increased value for money for the customer.
"We are firmly committed to the reduction of CO2 emissions, both in terms of the product and how it is delivered, and we will be assisting the Hungary team with a new range of 1.6 mid-size diesel engines to cut fuel consumption by up to ten per cent," Malcom said.
The firm has also signed an agreement with BMW for its Mini model.
