GKN to shed 1,200 more jobs after slide into red

Published on Tuesday 4 August 2009 21:44

CAR parts and engineering firm GKN is to cut an extra 1,200 jobs over the next two years after its end markets took a further battering from the recession.

The news came yesterday as the Redditch-based company crashed to a 16 million pre-tax loss for the first six months of the year – compared with a 118m profit for the same period a year earlier.

GKN slid into the red despite 2,500 jobs going in the first half under previous cost-cutting plans – 564 in the UK.

The extra job losses will not affect UK staff but came after weaker-than-expected car markets in the US, Japan and Europe as manufacturers used up stockpiles to cope with plunging demand.

GKN's off-highway division, which makes products for tractors as well as heavy equipment used in mining and construction, has also seen a "more rapid and deeper" decline than forecast.

But the firm, which employs some 6,000 people in the UK, added that its swingeing cuts programme was beginning to have an impact on the automotive division, which returned to profit in June.