GKN makes re-alignment progress
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The automotive, aerospace and off-highway manufacturing giant GKN said yesterday that it had made significant progress in realigning its operations but had needed to extend its head count reduction and facility closures.
The original restructuring plan had included reducing global headcount by around 5,260 people by July 2010, with 13 manufacturing sites to be closed. However, as markets weakened during the year, restructuring activities were extended, such that around 3,500 employees left the Group in 2009 and 13 facilities were affected by closure actions.
The company's 2009 results reflected the decline in Automotive, Powder Metallurgy and OffHighway sales, a strong performance in Aerospace and the benefits from restructuring, it said. Underlying sales were down 22% (£1.134 billion), producing a trading profit of £152 million, down £69 million.
Chief executive Sir Kevin Smith (pictured), commented: "GKN has made significant progress in realigning its operations to weaker markets and preserving cash. In response to the global recession we restructured the Group to reduce the break-even points in Automotive, Powder Metallurgy and OffHighway by around 20% and re-positioned our Aerospace business for lower aircraft production volumes in 2009. As the year progressed, automotive production improved and the benefits of the Group's restructuring plan increased. As a result, all divisions were profitable in the fourth quarter, with the exception of OffHighway."
Looking ahead, GKN said the outlook for its major markets was mainly positive although some uncertainty remained. In automotive, forecasters expected a good improvement in global production; in aerospace, the US defence market is expected to remain solid; and off-highway markets are showing some signs of improvement, particularly for heavy construction and mining equipment. Expectations are for a steady, although modest, recovery in demand through the year.
