Page 111 - Socially-responsible-restructuring-Effective-strategies-for-supporting-redundant-workers

Socially responsible restructuring
Effective strategies for supporting redundant workers

6.4. GKN Driveline Birmingham Ltd, United Kingdom
(CASE STUDY 4)

6.4.1. Background and context
GKN Driveline is a UK public limited company with a history dating back to 1759.
Today it is the world’s leading manufacturer of automotive driveline components
and works in partnership with leading motor vehicle manufacturers to develop
drive shaft and geared component technologies. The company has a worldwide
workforce of around 21 000 based in 30 countries including many EU Member
States.
For at least the past five years the company has been restructuring through
the effects of globalisation and the emergence of competition from lower cost
manufacturing countries. However, the recent downturn in the sales of motor
vehicles worldwide has affected the business and led to further change and
consolidation.
This particular case study is focused on the company’s activities in the West
Midlands region of England and, in particular, the sub-regional area centred on
the city of Birmingham. This has a long tradition of engineering and
manufacturing, including a large presence of the motor vehicle industry and all
the relevant supplier firms. GKN it has operated for many years with three
separate plants, each focusing on a specific activity: Erdington in the production
of drive shafts; Walsall in the production of prop shafts; and Hamstead for the
forge. The combined workforce five years ago at these three plants was around 3
500; after the current restructuring exercise, it is now down to 700 employees.
The decision was taken to close completely the forge operation at Hamstead,
where the plant needed considerable investment to upgrade the installations that
could not be justified, and focus production in Germany, Spain and Poland, which
have more modern facilities. Also, the Walsall plant is scheduled to close in June
2010 with production switched to the Erdington plant, which will remain the focus
of the company’s production operations in the Birmingham area.
The profile of the workforce is about 60% direct staff, working on the
production side and the remaining 40% in support operations from engineering,
R&D, through to the usual marketing and administrative functions. The
production staff contains a mix of skilled and semi-skilled, the latter generally
recruited without the need for formal qualifications since job-related training
would be given. However, the emphasis over the past five years has been on
workforce reduction rather than expansion and many of those remaining in the
workforce have long service, with over one-third having been with the company in
excess of 30 years.

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