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where continuous improvement and innovation is
becoming routine.
GKN people, however, know that they can count on high
levels of support both in helping the Group achieve its
strategic objectives and in developing their own abilities
and aspirations.
A key feature which has emerged during recent years is
what we call The GKN Way. At its heart is a common
language and a common set of values, metrics,
management processes and a core principle that
development opportunities will be available for all GKN
employees. In 2007, as part of an intensive programme of
employee development, we completed a training
programme for 1,000 leaders in the principles and
practices of Lean Enterprise as part of our ongoing
training in continuous improvement techniques.
GKN people are no longer separated by geographic,
business or market boundaries — increasingly they have
come to feel and to act as one team.
Pledged to help those in need
This has been the year of GKN Mission Everest when we
supported adventurer Bear Grylls in his successful quest
to fly a powered paraglider higher than Mount Everest.
GKN people have a tradition of supporting their
communities but we used GKN Mission Everest to inspire
them to do even more. In return, we pledged to donate
funds to children’s charities in Africa.
6 GKN plc Annual Report 2007
Chief Executive’s Statement
continued
The development of innovative technologies is
at the heart of how we will create a sustainable
growth path for GKN.
During 2007 our people contributed $1.7 million of extra
support to their local communities in the Americas,
Europe and Asia Pacific. The Group gave $500,000 to
African charities in 2007 and in 2008 we will donate a
further $500,000.
Leading a team which has taken such a compassionate
challenge to its heart has been deeply moving. Thousands
of GKN people across the world have proven themselves
to be truly extraordinary and I am proud of them all.
Outlook
The outlook for our major markets remains positive
despite continuing uncertainty around the global
economy.
Automotive production in the emerging markets of Asia,
Eastern Europe and Latin America is projected to
experience continuing strong growth. North American and
Western European markets are set to soften leaving
overall growth in global production at around 3%.
OffHighway and Aerospace markets are forecast to
remain strong.
Raw material costs are expected to remain both volatile and
high, with scrap steel costs, which have risen sharply in
recent weeks, presenting a potential headwind for the year.
Conversely, if sterling were to remain at current levels
against major international currencies there would be a
significant translational benefit to Group results.
Against this background, the Group expects to see further
solid improvement in its Automotive and Powder
Metallurgy businesses and continued strong growth in
OffHighway and Aerospace.
Our strategic restructuring is complete, leaving Driveline
and Powder Metallurgy with excellent global positioning
and a stable operating footprint from which to deliver
their strong order backlogs.
OffHighway order books are at record levels and its end
markets remain robust.
Aerospace order books continue to be very strong and the
full year impact of the Teleflex acquisition will support
further good progress in 2008.
The Filton acquisition, which will significantly
strengthen our Aerospace business, should complete
around mid year.
Overall we expect 2008 to be another year of progress
and growth for GKN.
Sir Kevin Smith
Chief Executive
The Group expects to see further solid Annual Report 2007 GKN plc 7
improvement in its Automotive and Powder
Metallurgy businesses and continued strong
growth in OffHighway and Aerospace.
Chief Executive’s Statement
GKN Mission Everest
2007 saw the launch of GKN Mission Everest
— a powerful symbol of the Group’s ambition,
innovation and teamwork.
The daring feat to fly a paraglider higher than Mount
Everest was successfully completed on 14May and
acted as the focal point of a global challenge for GKN
employees to increase their charitable activities.
The response has been extraordinary. Across the world and in all
manner of ways GKN employees have taken up the challenge to
do even more for their local communities and to bring new hope
to some of Africa’s most deprived children.
. . . find out more page 46
www.gkn.com
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