GKN automotive production plummets

After the close of London Stock Market trading this afternoon, the company provided an update on its outlook for the year ended 31 December 2008 “in the light of a further rapid and material decline in conditions in its global automotive markets”. In a statement at the end of last month, GKN indicated that it expected 2008 profits to be in the region of 20% lower than 2007. Today, it said that in the last seven days there had been very significant reductions in customer schedules which would result in the company’s November and December production levels in its Driveline and Powder Metallurgy businesses being sharply lower. “We now anticipate production in these two months to be around 20% lower than our earlier expectations, with activity levels 40% lower than in the first half,” the statement said. It went on: “We had already instigated actions to flex our operations through the balance of the year, with many of our automotive operations closing for the year from around the second week in December. Further opportunities for cost reduction in this short timeframe are therefore limited and we are currently reviewing the likely impact on profits for the current financial year. Further guidance will be provided as soon as possible.” GKN, which is headed by CEO Kevin Smith (pictured) and earlier this year announced its successful bid to run the Airbus Filton plant, said its OffHighway and Aerospace businesses were continuing to operate as previously anticipated and were expected to show strong year on year growth in both sales and profits.