GKN share price slumps as group drops incoming boss

GKN's new chief executive is leaving the company before he's started as firm braces for bigger write-off

Troubled British engineer GKN said Kevin Cummings, lined up in September to become its new chief executive, would now leave the company with immediate effect after it decided it needed alternative leadership.

Shares in GKN (LON:GKN) have fallen deep into the red in London in today's session as the company announced that it had sacked its new chief executive, weeks before he was due to take the helm at the blue-chip company.

Anne Stevens, now a non-executive director, will assume the role of interim chief executive with effect from January 1 2018, replacing Mr Stein who steps down at the end of the year. He has been chief executive of the aerospace division since January of 2014, and was appointed to the board two years afterwards.

Nigel Stein will continue as chief executive until he retires at the end of December, the FTSE 100 company said.

GKN said it would incur an additional cost of £130 million at its North American aerospace unit. The group's shares have lost more than five percent of their value over the past year, and are down by some 13 percent in the year-to-date.

The appointment of Hans Büthker, the former boss of Fokker Technologies, as chief executive of the group's struggling aerospace arm will be brought forward to take effect immediately.

Investors took fright as GKN also said a review of its United States aerospace plants had uncovered a further hit, with additional write-offs of between £80 million and £130 million.

Last month, GKN warned that profits will only be "slightly above" 2016 after it disclosed a £40 million hit linked to legal claims and the Alabama writedown.

"While this review is not yet complete it is likely to result in a further write-off estimated to be between £80mln and £130mln, much of which built up before 2017".

The company manufacturers products such as wing tips for Airbus and various parts for car-makers.

GKN - which has its headquarters in Redditch, Worcestershire - said Mr Buthker will "work with the rest of the executive team to develop plans to improve margins and cash flow across the group".

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