Engineering group GKN is cutting jobs in Birmingham while reassuring investors that trade in the automotive and aerospace sectors is recovering.
The Redditch-based group has made 19 people redundant at its Aerospace Transparency Systems plant in Kings Norton.
It said the job losses were due to a fall in orders at the former Pilkington-owned factory, which produces aircraft cabin windows and flight deck screens.
“We have seen significantly reduced requirements for aircraft and it is an unfortunate situation which we have tried to avoid for as long as we can,” a spokesman for GKN Aerospace said.
The job cuts are across the board at the Kings Norton site. Some of the 19 people affected have already left and the rest will go at the end of the year.
It leaves a workforce of about 250 at the factory, which GKN acquired from Pilkington in October 2003.
Two months ago, GKN Driveline, part of the group’s global automotive operations, announced 50 more job losses at a plant in Chester Road, Erdington, on top of 86 redundancies in February.
The cuts are part of a restructuring exercise that the company says will now cost £130 million compared with the £103 million announced previously.
Meanwhile, GKN said in a trading statement to the London Stock Exchange that its full-year profit would likely beat market expectations as demand continued to improve, boosting hopes of a recovery in the aerospace supply sector.
“Profit before tax for 2009 is expected to be in the range £70 million-£80 million,” the statement said. “Overall demand in our major markets has been better than anticipated since October.”
GKN said its aerospace unit, which produces airframes, engine structures and components for planemakers Airbus and Boeing, was performing well and that there had been no further reduction in civil aircraft ordering schedules.
A drop in global passenger demand has Airbus and Boeing headed for their worst annual order tally in at least 15 years as airlines cancel and defer orders.
However, the start of production on Boeing’s 787 Dreamliner, which recently completed its long-delayed first test flight, should underpin GKN’s medium-term revenues.
Arbuthnot analyst Xavier Gunner said: “Despite the economic conditions, aerospace margins have remained strong, although it’s clear business in the sector is under pressure.
“But we are starting to see positive momentum in various areas ... and have upgraded our 2009 pre-tax profit forecast to £76 million from £43 million.”
GKN said sales at its automotive arm had improved in the fourth quarter, helped by government incentive programmes to support the sales of smaller light vehicles.
