GKN plc (UK) announced dramatic UK restructuring efforts, closing two manufacturing facilities, consolidating both into a third in Erdington, Birmingham. Its other UK facilities are also substantially cutting jobs. All this as GKN's UK plants are working four-day weeks and reporting sales already lag 2008 by 60%.
GKN said the moves are necessary if its driveline component manufacturing operations in the UK are to remain financially viable.
With the consolidation, Erdington (formerly a Hardy-Spicer plant) will receive at least £7 million in capital investment by 2012 as a "center of excellence", and add approximately 100 jobs. Currently, Erdington manufactures finished driveshafts and CV joint bearings for European automakers such as Jaguar, Rover, Toyota, Nissan, and Honda.
One plant being closed is Hamstead Forge, opened in 1938 and set to be shuttered by the end of this year as newer and more efficient European forging operations take over its work. The other is a finished parts plant in Walsall, scheduled to be closed by mid-2010. All told, the two closings will cost nearly 600 jobs.
Ironically, in the short term, GKN has been forced to lay off an additional 84 workers at Erdington as demand continues weak.
Finally, approximately 150 will be laid off from the company's chassis parts plant in Telford; GKN Aerospace plants in Luton and in Burnley are cutting a total of 90 staffers, 56 of those lost as Aerospace Services in Burnley is shuttered completely.
GKN Automotive CEO, Nigel Stein, said: "The actions being announced today are regrettable but absolutely necessary to respond to the global economic downturn that is particularly affecting the automotive industry. We are in unprecedented times and we must protect our position as a leading global automotive supplier and ensure we are in a strong position to meet our customers' needs now and when markets recover."
In response to union complaints that UK plants were unfairly targeted, the company said: "In 2008, GKN reduced its total workforce by 3,450 and GKN Driveline reduced by 2,000 jobs globally. Of these, only 96 jobs were in UK plants, so it clearly is not the case that GKN is being opportunistic in the decisions it has taken that affect the UK."
At the beginning of 2009, GKN had 6,400 employees in the UK, 2,000 of whom were involved in producing auto industry components.
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