Technology and engineering giant GKN, which has a large site in Telford, today announced it was axing staff and closing plants to offset an expected massive fall in profits.

Management and unions at the GKN Sankey plant in Telford today said they were battling to avoid compulsory redundancies following a major cut in orders.

The announcement came as Prime Minister Gordon Brown said the Government would press on with its policy of increasing borrowing in a bid to tackle the economic downturn, despite experts criticising the plan as “misguided” and preferring tax cuts.

London’s leading share index, the FTSE 100, also plunged to a five-year low after heavy falls across Asia. It dropped by more than 200 points at one stage – a fall of five per cent – taking the Footsie back to levels not seen since March 2003. 

GKN, which employs 5,000 people in the UK, is based in Redditch, Worcestershire, and has two plants in Birmingham, as well as the one in Hadley Castle. It is expected to see pre-tax, automotive profits down by 70 per cent as demand continues to weaken.

The firm has previously announced it was cutting shifts at Hadley Castle following a major cut in orders by Land Rover. The company, which makes chassis, car underbody components and wheels principally for Land Rover, Ford and Toyota, employs about 950 people at the plant, but one shift has already gone. 

Rob Ball, human resources director, said agency staff were being released and bosses were working with unions to try to avoid compulsory redundancies.