GKN cuts further 1,400 jobs, plans more in 2009

British aerospace and automotive engineer GKN Plc added to gloom in the jobs market by announcing a further 1,400 layoffs on Wednesday and plans for more cuts for 2009.

Pretax profit will come in at the higher end of the 150 million-170 million pound range it gave in November, it said in a trading update, lifting shares more than 11 percent in opening trade.

The company, which employs around 42,000 people, issued two profit warnings within three weeks towards the end of last year and cut 1,400 temporary staff.

GKN said in a statement it would make further cost savings in 2009, including short-time working, plant shutdowns and more workforce reductions, which would result in cost savings of around 120 million pounds ($169.3 million) in 2009.

"Our restructuring actions will continue in 2009 and deliver significant cost savings which will help reinforce the group's resilience, in the face of the global economic downturn," it said.

Shares in GKN, which hit a two-year low of 60.5 pence in November, were up 10.7 percent at 85 pence at 0819 GMT.

West Midlands-based GKN has been hit by the sharp downturn in automotive demand as the lack of credit chokes off consumers' ability to purchase cars.

The British government on Tuesday pledged to guarantee up to 2.3 billion pounds of loans to help the British car industry, which suffered its sharpest fall in output in nearly 20 years last month.

GKN also said the weaker pound added around 220 million pounds to net borrowings, taking them to 710 million pounds at Dec. 31, compared with 693 million at end-September.

It said its aerospace business, which it recently expanded with the purchase of Airbus UK's Filton wing parts business from EADS, had continued to perform strongly although the market had experienced some signs of softening in the final quarter.