GKN CELEBRATES 250 YEARS
By Julian Nettlefold
17 Sep 09. A unique event in British Corporate history took place on Thursday evening, the 250th Anniversary Party of the founding of GKN. The Editor took his son Harry for what was a great celebration of a Company started by three Bermingham entrepreneurs all those years ago. Group CEO Sir Kevin Smith, CBE gave an excellent introduction to the history of the Company and proved the ‘people worth’ of the Company by making many awards during the evening.
From small beginnings this great Company has been steered through many wars including two World Wars numerous recessions, partial nationalisation, profits warnings and lay offs and has survived as a thriving part of the British economy, producing billions of pounds a year in revenue and tax for the Exchequer. But, this didn’t happen overnight and it has taken patience, foresight and good stewardship to take GKN to the position it is in today and for the next 250 years. It is worth looking back on the formation of GKN by Mr Guest, Mr Keen and Mr Nettlefold in 1759.
The world was a very different place in 1759, called ‘The Year of Victories,’ the fourth year of the Seven Years War (1756-1763). Former British colonial army officer George Washington, now 26, married Virginia widow Martha Custis (née Dandridge), 27, January 6 at her estate in Kent County. Britain’s grain crop fails, raising prices and provoking demands that the government import grain. The British Museum opens January 15 at Montague House in London’s Bloomsbury section. County Kildare brewer Arthur Guinness, 34, acquires a neglected Dublin brewery at James’s Gate, signs a 9,000-year lease in September on an acre of property. John Harrison completes Number Four, the marine chronometer that will eventually win the British Board of Longitude’s prize for a practical way to find the longitude at sea.
GKN in 2009
We interviewed Kevin Smith at the GKN London office last month.
“You certainly chose a tumultuous year to celebrate the 250th Birthday of GKN!”
“Yes, at the start of the severest downturn the world has faced since the Second World War, we had a meeting of our Group Heads and decided that the gods were going to put us through a thorough test to prove our mettle to take GKN through the next 250 years!” Kevin Smith said.
“How severe has this downturn been for GKN?”
“Given that fifty percent of our business is in the automotive industry, which is always the first area hit in a downturn, the cuts we faced were severe. It was in effect a double whammy as the hit on financial institutions meant that leasing contracts, common for automobile financing in the USA in particular, virtually evaporated overnight and people stopped buying cars. This had a huge effect on those Companies such as ours whose customers have extended supply chains supplying goods from Europe to Japan and the USA in particular; this caused a huge focus on inventory reduction. Demand dropped off a cliff in the middle of 2008 with demand down right across the board, Chinese demand dropped by twenty two percent in December and Brazil a massive fifty six percent. However we have seen a marked improvement with June down only thirty percent globally which means, with our cost-cutting programme, that all our Divisions will see return to profitability very quickly. We reduced our inventory by a massive £100 million in the first six months of the downturn. We see our Aviation Business facing a downturn in the next leg of the cycle as Boeing and Airbus have kept up production levels in 2009 into 2010. This may well drop in 2010 as the airline recession hits.”
“How did you deal with this?”
“GKN has a history of acting quickly in changing times and this says a lot for our heritage of being a global business for 100 years. We were in Australia in the early part of the last Century and we have been in India since 1934. At our Redditch Headquarters we have a multi-cultural approach to