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a range of new product launches under way, we expect
Powder Metallurgy to resume progress in 2008.
Off-highway markets have been favourable with solid
demand for agricultural machinery in both Europe and
North America. Demand for heavy construction and
mining equipment more than offset a weakening in the
North American light construction segment. The Rockford
Powertrain business made an excellent first full year
contribution and the Liuzhou wheels acquisition in China,
which completed in November 2006, has integrated well.
Aerospace has again performed strongly and, with some
contribution from acquisitions, produced double digit
sales and profits growth. Order books were also
strengthened in buoyant commercial markets, with Boeing
and Airbus having a record sales year, and the US defence
markets also providing much new opportunity. Additional
business was gained on existing programmes and
significant work packages won on a number of new
programmes. The most notable new programme wins
included the aft fuselage structure for the new Sikorsky
CH-53K military helicopter and blended winglets for
retrofit to Boeing 767 and 737 airliners to aid improved
fuel efficiency. The Teleflex acquisition which completed in
June strengthened GKN’s position in the engine
component sector and secured access to ‘hot section
components’ for the first time.
In December we were pleased to be selected by Airbus as
the preferred partner for the acquisition of the wing
component and sub-assembly facility on their Filton site,
including the potential award of major design and
manufacturing packages for the Airbus A350 XWB wing.
There is much work to be done over the coming months to
turn the selection into definitive contractual agreements
— we are, however, extremely excited by the opportunity
offered by this major strategic partnership with Airbus.
Chief Executive’s Statement
Sir Kevin Smith
Chief Executive
Chairman’s Statement
Chief Executive’s Statement
The Group delivered another year of increased
sales and a significant improvement in profits
and earnings per share.
www.gkn.com
A passion to innovate
Our continued success can only be assured through the
sustained development of innovative technologies
and products.
This year sees the introduction into the marketplace of
GKN’s highly acclaimed countertrack™ constant velocity
joints which are fitted to a number of new vehicles being
launched during 2008. These joints have set new
standards for size, weight and efficiency, supporting
vehicle manufacturers’ drive for lower emissions.
GKN’s technologies for the 21st century are being applied
across the vehicle spectrum. The new Tata Nano, launched
in India this year, is the world’s lowest cost car with a price
tag equivalent to $2,500. Our new driveshaft for low cost
vehicles is a key component within the new car.
Meanwhile, BMW are launching the X6, a new premium
vehicle which utilises GKN’s electronic torque vectoring
technology — the most advanced traction control system
in the world.
In Powder Metallurgy our technology enabled the launch
of a world first high performance manual transmission
gear application.
In OffHighway we have developed the Hydromech gearbox
which improves the efficiency of combine harvesters. The
new gearbox has been introduced on a range of European
harvesters.
And in Aerospace we have validated, through our work on
the Airbus A400M, the design and manufacture of
composites for large aircraft primary wing structures. This
work will impact directly on the next generation of
airliners. Our work on composites will also help improve
the fuel efficiency of new jet engines. As part of an EU
programme we have also developed production processes
for composite products which do not require high
temperature curing ovens.
The development of technologies in tune with the times is
at the heart of how we will create a sustainable growth
path for GKN.
United by common goals
Within GKN we expect much from our people. Our leaders
are tasked with growing the business on a global basis,
focusing on delivering value to our customers and
managing teams often spread across continents. They
work in a business environment which is highly
competitive and typified by complex supply chains and
constantly developing technologies.
At plant level, supervisors and operators are at the front
line of our implementation of a Lean Enterprise culture
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