NORTH-EAST subsea engineering job will be safe in a £130m Chinese takeover deal, bosses have told The Northern Echo.

Zhuzhou China South Rail Times Electric (CSR) yesterday (Wednesday, April 15) completed an agreement to buy Specialist Machine Developments (SMD).

SMD is the parent company of Queen’s Award-winning subsea trenching company Soil Machine Dynamics, in Wallsend, North Tyneside, which makes remotely-operated vehicles designed to lay high-voltage underwater power cables.

Bosses say SMD will remain independent, with its management team continuing to run day-to-day operations, though a new board of directors will oversee strategy and financial decisions.

They added it will run as the global headquarters for CSR’s deepwater equipment division, allowing it to target new projects and build on existing rail-based work, with a Chinese subsidiary set to be opened to develop its presence in the country's maritime market.

Li Donglin, CSR chief executive, told The Northern Echo the move would strengthen both companies, and would not mean manufacturing jobs or contracts leaving the UK.

He said: “This deal will allow us to get better and better because we can use the similarities between the technology used for rail and maritime.

“Newcastle will be the headquarters and we will not cut off the workforce because we want to make sure the margins of SMD go higher.”

He also said the company was not worried about ongoing concerns over the price of oil.

The falling value of a barrel of oil has seen companies, including BP, Chevron and Shell, cut jobs, with Darlington’s DeepOcean UK, which digs trenches for underwater cabling, also forced to make redundancies.

However, Mr Donglin added: “We do not think the squeezing oil price will have an effect.

“It works in oil and gas, but other divisions too, so it will not be a problem.”

Speaking about the deal, Andrew Hodgson, SMD chief executive, said it would take the firm to new levels.

He added: “Becoming part of CSR will be a key step in our development as a business.

“We look forward to continuing to deliver to our markets in this new and exciting phase of our history.”

Earlier this year, SMD secured an order from dredging and marine construction company Jan De Nul Group for a 150hp ROV.

It also provides work for the North-East supply chain, with family engineering firm Francis Brown Limited, in Stockton, previously building launch and recovery machinery for SMD, which was sent to Brazil.

CSR, which is a subsidiary of China South Rail, was founded in 2005 and specialises in vehicle-mounted electric systems.

Its market share is spread across high-speed trains, high-power electric locomotives and urban rail vehicles.

In 2008, it bought British Dynex Semiconductor Corporation and bosses said it has since increased sales revenues by 81 per cent.