Have you heard of GKN?
Making things work for more than a quarter of a millennium
Watching a BBC documentary of a behind the scenes look at the opening ceremony of the 2012 Olympic games reminded me of how the industrial revolution was a centre piece of the performance, creating the illusion of the Olympic rings being forged from steel. Had it happened back in the latter part of the 18th century as new processes changed Britain for ever, those rings may well have been forged in iron by one of the UK’s greatest global brands. GKN’s forebears have been making things happen for over 250 years and the company Guest, Keen & Nettlefolds was formed via merger in 1902. The company is one of our leading global manufacturers, and yet it is hardly a household name.
Every time you get on a plane, or into your car you will likely be transported courtesy of vital components manufactured by a GKN subsidiary (“Engineering That Moves the World” is its current mantra). It has been a pioneer of technologies since it started making iron at the Dowlais works in Wales in 1759. In 1856 it became the first British company to acquire a licence to produce steel using the Bessemer process, taking a decade to fully develop the process to commercial production. By 1936 when Dowlais was shut the company had moved amongst other things into production of automotive components. In WWII it produced Spitfires, and in the 1960s provided the constant velocity joints (CVJs) that enabled front wheel revolution that fundamentally changed the car industry, supplying the legendary Mini. Today it produces the first composite material wing spars for Airbus on both military transport (A400M) and civil aircraft (A350XWB). The future in additive manufacturing (3D printing) stems directly from the company’ strengths in manufacturing and Powder Metallurgy. GKN remains at the forefront of technology development.
GKN Aerospace supplies all of the primary wing structures for Airbus aircraft
I have looked at GKN for only a small period of its history. However, even over those thirty years GKN has had to evolve to survive, in common with most other UK based industrial companies of the 1980’s. The steel businesses are gone, with the constant velocity joint based Driveline business still the core of the group today with a greater than 40% global market share. It has also built leading positions in AWD (all wheel drive) and eDrive (electric and hybrid driveline products).
GKN Driveline potential vehicle content
Over the last 20 years the company has developed an aerospace business that now ranks second in the world for aerostructures and engine systems, and as part of the recent Fokker acquisition has bought the number 3 wire harness manufacturer in the industry. Its Powder Metallurgy division is one of the world’s largest metal powder producers and a clear leader in ever more intricate sintered components with more than 15% of the market.
GKN was one of the initial constituents of the FT30 Index in 1935, and only one of two of the original companies (with Tate & Lyle) that survive today (exit being by failure or takeover). Given its history, a £5bn market cap establishing it firmly in the FTSE100 and its significance in our lives, one might think it would be a household name.
However, ask most people outside of financial markets if they have ever heard of GKN, I suspect that sadly the answer is probably no. Maybe it is time for a brand awareness campaign on TV. However, maybe the answer is that nobody needs to know. GKN has survived longer than most companies to date, and perhaps another 100 years may be on the cards. I just feel a greater appreciation of its brand may rub off on its rating, which retains a cyclical discount despite the growth of the aerospace contribution, and the clear adherence to a value creation philosophy.
As Churchill once said “The future is unknowable, but the past should give us hope.”
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