GKN dives as it axes staff and profits fall

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GKN supplies all major car and light vehicle makers with components and, while it had anticipated a massive slowdown in the US market, it had not expected the rapid knock-on effect on the European and rest-of-the-world markets. The group said it had already moved to cut its workforce, shut down some plants and moved to short-time working at others.

Most of the job cuts will come among the 1000 temporary workers among its 42,000 worldwide workforce. In the UK, GKN employs around 5000 people, of whom 2000 are in the automotive businesses.

The scale of the slump in car manufacturing has been so great that GKN expects its fourth-quarter automotive profits to be 70% down on the same quarter in 2007.

GKN also said that while aerospace demand had held up well it expects to be hit by the Boeing strike in its final quarter. It said: "We now expect group profit before tax for the year to be around 20% lower than 2007."

Most analysts had been looking for modest growth, with profits forecast to rise from £255 million in 2007 to around £265 million. Those forecasts have now been slashed to around £200 million.