GKN takes action to mitigate effect of COVID-19 across its business
April 7, 2020
Melrose Industries PLC, UK, parent company of GKN Group, reports that it has taken significant action to help mitigate the effects on its business during the global coronavirus (COVID-19) crisis. With the Automotive and Powder Metallurgy businesses’ factories now largely closed outside of Japan and China, Melrose has announced a hold on payment of its final 2019 dividends as well as cuts to pay across senior staff members.
Following a successful 2019, the group traded in-line with management expectations from January through to mid-March 2020. However, from mid-March onwards a significant deterioration started to be seen and was experienced in the end markets that Melrose serves. As a consequence of the changed market environments, significant and accelerated management actions have been put in place across all businesses and countries in the Melrose Group, to reduce cost and preserve cash until the market positions improve.
It was stated that Melrose is acting appropriately with regard to its employees and cost base, and taking advantage of various governmental schemes wherever it is suitable to do so, primarily in the UK and Europe. In many of its businesses (including Melrose), senior salaried staff are taking a temporary 20% pay cut to help support the business.
“While the current circumstances are unparalleled, Melrose has a track record of managing our businesses successfully in tough times and we thank all our employees for their extraordinary efforts to ensure this happens again,” stated Simon Peckham, CEO of Melrose Industries PLC. “We have taken very significant action to mitigate the effect of this unprecedented crisis. With the help of our employees, we will do whatever is needed to protect the group and to ensure that it is in the best position to move forward when this crisis recedes.”
Melrose stated that the group’s Aerospace factories are still largely open, but running with reduced requirements, and all Chinese factories across all its businesses are now open.