GKN to split Telford Land Systems division as firm announces job losses
The Telford division of engineering giant GKN is to be carved off into another part of the company as it seeks to reassure workers over the future of their role in the business.
The firm has revealed to the stock market that its Land Systems division is to be split in two, after it suffered another plunge in sales.
It comes after it was revealed yesterday that staff in its Land Systems division, including more than 300 people based at Hadley Castle Works in Telford, had received letters reassuring them that the company intends to continue investing in their operations.
While the company as a whole has continued to grow, the Land Systems operation suffered another period of struggle in the nine months to September 30, with tough conditions in the farming sector and the loss of two chassis making contracts to blame.
Total Land Systems sales were only £1 million lower at £534 million for the period, but on an organic basis they declined by eight per cent – essentially meaning while it had lower sales, the value in pounds of those it achieved overseas increased because of the fall in the value of sterling.
Now the Land Systems division is to be abandoned, with the shafts and services segment being reported in GKN Driveline, and wheels and structures – the bulk of the work carried out at Hadley Castle Works – being regarded as Other Business.
Overall, the results show sales grew by two per cent, but when factoring in the fall in the pound, that figure balloons to 21 per cent, with total sales clocking in at £6.9 billion.
"GKN has continued to make progress," said chief executive Nigel Stein.
"In line with the global economic outlook, we see growth rates easing in our major markets.
"Despite the slightly tougher macro-economic environment, the group continues to expect 2016 to be another year of growth."
The news for workers in Telford follows the publication of a letter promising a secure future for employees who had been in the Land Systems division.
Written by Land Systems chief executive Adam Walker, it said: "Change brings uncertainty but for the vast majority of you there is no change. We continue to build a better business, support our customers, operate in a safe working environment and look after our people, just as we did yesterday."
