GKN to warn of further job losses

Engineering group GKN, which has a UK workforce of 6,500, has warned it may axe more jobs as a result of the slump in the car industry.

Since October, it has eliminated 1,400 positions from its automotive division. The firm supplies companies such as Jaguar Land Rover and Ford who are struggling as consumers cut back amid the economic downturn.

According to GKN, all its car part plants are working shorter weeks due to a slump in demand.

The company is expected to update the market today and analysts are expecting an announcement about headcount reduction.

GKN has a global workforce of over 42,000.

In related news, Business Secretary, Lord Mandelson, unveiled a rescue package of £2.3 billion for the UK’s ailing car industry yesterday.

The package comes after months of pressure on the Government to take action after the Society of Motor Manufacturers and Traders (SMMT) warned that the industry was “battling” for its survival.

However, Mandelson said the package is not a ‘bailout’ or a ‘blank cheque’ but measures include £1 billion of direct loans and a nationwide scheme designed to help British manufacturers meet demand for environmentally-friendly motors.

Furthermore, Lord Mandelson revealed guarantees for £1.3 billion in loans from the European Investment Bank.

Meanwhile, a further £35 million could be made available to increase funding for retraining workers in the industry.

Commenting on the package, Lord Mandelson told The Times that he believes “the measures will provide a specific boost to the industry“.

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