Experts have saluted the return of engineering giant GKN to the FTSE 100 Index as a boost to the West Midland manufacturing sector.
The Redditch-based firm began its first week on the prestigious list in six years this week after the takeover of rival engineer Tomkins meant a space opened.
The return represents a major boost for the company – as well as the region’s automotive and aerospace industries – as it comes just two years after GKN appeared to be nearing collapse due to plummeting car sales.
But after a £423 million rights issue and some hefty job cuts the company is now one of the few manufacturers represented alongside mining, energy and financial giants.
It returned to the FTSE 100 with annual sales totalling more than £4 billion and manufacturing interests spread across the globe.
Birminghampost.net blogger Howard Wheeldon, senior strategist at BGC Partners, said the company has struck success by keeping traditional skills but moving with the times.
He said: “The GKN of today is a truly global manufacturing business – automotive, aerospace, powder metallurgy and off-highway components and products. Apart from the UK based manufacturing interests GKN businesses can be found across the USA, Japan, China, South Africa, Argentina, across Europe plus other international locations.
“This is a business that was of course born around the iron and steel industry and that over the years expanded through a variety of other industrial manufactured product. With roots going back to the mid-eighteenth century the common denominator of manufacturing that was very apparent then remains just as important for GKN in the 21st century.”
The FTSE 100 is a share index of the 100 most highly capitalised UK companies listed on the London Stock Exchange.
GKN, which employs 5,500 people in the UK, has managed to earn its spot on the list by building on its strength in the automotive, aerospace, powder metallurgy and off-highway components sectors.
It has also shifted manufacturing across the globe, including Japan, China, South Africa, Argentina, and has more than 38,000 members of staff worldwide.
The company, which dates back to 1759, is also developing a new division called Land Systems which will focus on low-carbon technologies such as blades for wind turbines and driveline technology for high-speed trains – established as growth industries.
Guy Stainer, director investor relations and external communications at GKN, said: “Being back in the FTSE100 is excellent news for GKN. The strong share price performance not only reflects a pick-up in our automotive markets but also the continued strong performance in aerospace and significant new business wins across the group. Our recent results clearly demonstrate improving profitability and margins and also strong cash flow generation.”
Lord Kumar Bhattacharyya, who last week told the Post that manufacturing was key to the West Midlands trading its way out of economic gloom, said GKN had a vital role to play in this.
Lord Bhattacharyya, the founder of Warwick Manufacturing Group, said: “GKN is at the forefront of British manufacturing.
“We need companies like GKN to provide growth for the future.
“It is a global company. It is one of the few manufacturing giants that is based in the Midlands and we should be proud of it.”
Rachel Eade, automotive cluster manager for the Manufacturing Advisory Service in the West Midlands, has worked alongside suppliers to GKN for years in her former role at support body Accelerate.
She said the company held a strong position in terms of the automotive and aerospace supply chain.
She also believes the emergence of manufacturers among the country’s strongest firms was a positive sign for improving relationships between the industry and the finance sector.
She added: “I think this signals an exciting message about the return and re-emergence of the manufacturing sector, linked with the Government’s plans for providing private sector jobs.”
*To read Howard Wheeldon’s blog in full – GKN - as old as the industry, as modern as the hour – visit birminghampost.net/howardwheeldon.