“The first half trading environment has been very challenging for GKN as the global recession impacted our businesses, initially automotive and powder metallurgy and more recently in offhighway,” said Sir Kevin Smith, chief executive of GKN plc. “In response, we have aggressively cut costs, with a further 2,500 people leaving the Group in the first half of 2009, and conserved cash, by reducing capital expenditure and working capital. Towards the end of the period, as production schedules stabilised and with the benefits of the restructuring, automotive (including powder metallurgy) returned to profitability.”

According to its market reports, the group results were significantly impacted by the decline in automotive and offhighway sales, despite extensive cost cutting. In 2008, the company had a trading profit of £23 million, down £138 million.

This upturn in profits may be due to new business secured by the company, including the electric rear axle for PSA Hybrid 4 and strong interest for hybrid/electronic drive products. Additional revenue has also been secured on Joint Strike Fighter and A350 programmes.