GKN clarifies auto difficulties

With automotive customers cutting back their schedules, GKN - headed by CEO Kevin Smith (pictured) - said its own global production schedules for November and December were now around 20% lower than its end October expectations with very significant further deterioration in major regions: 20% in Germany, 25% in Brazil, 22% in Japan and 25% in China. The latest statement said: “We have intensified cost-cutting measures in all regional operations. Our workforce has been reduced by 1,400 people since early October and 61 automotive and powder metallurgy plants are now on short-time working with additional plant shut downs through the balance of the year. It will not be possible, however, to align our cost base with these much reduced levels of demand for the remainder of the year and our automotive businesses are now expected to make a trading loss in November and December.” In the extremely volatile automotive market, GKN said it was difficult to provide precise guidance for the out-turn for the year but it expects pre-tax profit to be between £150m-£170m, with performance at the higher end largely dependent on no further significant reductions in automotive schedules.