Car parts and engineering firm GKN has returned to the black as its automotive arm benefited from a recovery in the global car market.
Its Driveline business, which makes driveshafts for almost half of new cars, saw sales increase by 35% as strong demand in China, India and North America pushed global sales of light vehicles up 24%.
The strong performance of Driveline, which has sites in Redditch and Birmingham, helped GKN make bottom-line pre-tax profits of £345 million in 2010 compared to a loss of £54 million a year ago, while revenues increased 20% to £5.1 billion.
GKN expects a 5% increase in global car and van sales in 2011 although the Western European market is expected to be flat as the withdrawal of Government car scrappage schemes hits sales.
Other parts of GKN’s business also benefited from the global economic recovery.
The group’s powder metal technology arm, which provides components for manufacturers, saw sales increase by 48% in 2010, while its land system business, which supplies products to heavy industry and agriculture, was up 18%.
Sales through its aerospace arm, which makes fuselage, fan blades and cockpit windshields from sites including Yeovil, Luton, Derby, Portsmouth and the Isle of Wight, declined by 2% and are not expected to return to growth until 2012.
GKN said its civil aerospace division is expected to grow this year as Boeing and Airbus step up production but this will be offset by declining sales to the military.
The group, which was badly hit by the global economic downturn, has stripped out costs with a major redundancy programme since November 2008. This saw 15 factory closures and 7,000 of its 42,000 staff go, including 560 in the UK – although employee numbers have since climbed to 40,000.
GKN added to its UK personnel in 2008 after buying Airbus’s Filton site and now has 6,000 UK employees.