GKN, 2014

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GKN plc, as a global engineering systems and components supplier, enjoys a distinguished history dating back over 250 years. It includes business dealings with Isambard Kingdom Brunel through the Guest family in Wales, and it was the Birmingham entrepreneur, Arthur Keen, who bought out the Guest business, Dowlais, in 1899, and who, two years later, acquired that of fellow Birmingham businessman, John Nettlefold, resulting in the formation of Guest Keen and Nettlefold, later to become known as GKN.

Income generation, from four operating divisions – Driveline; Aerospace; Powder Metallurgy and Land Systems, delivered £7.13bn revenues in 2013 and £484m Profit Before Tax (PBT).  2014 interim results show sales increased 6% organically, but stood 1% lower after a £247 million currency hit following the appreciation in sterling over the past year. Profit before tax was up 6%, with a £24 million adverse currency impact, with reported profit before tax at £224 million (2013, £127million). Driveline performed strongly with 11% organic growth.

Employing 49,700 people in around 150 plants across 33 countries, the company has enjoyed healthy growth, very nearly doubling sales over the past six years, up from £4.4bn in 2009 to almost £8bn in 2013 and enjoying 10% growth year on year between 2012 and 2013.

GKN sells into many markets with ten major customers accounting for over half their sales. 40% of cars built today are fitted with GKN drive shafts with over 90% of commercial aircraft taking off every day powered by GKN technology. Whilst automotive outgrew its market segments in 2013, aerospace grew in line with markets. Driveline saw a 23% sales increase in China during 2013 following 6% growth in 2012.  The company produces All Wheel Drive (AWD) systems as well as being a tier 1 supplier into leading global aerospace OEMs, including Rolls Royce, Airbus and GE.

Chief Executive, Nigel Stein, sees diversity in customer markets as a source of strength with different sectors sharing common trends. For example, auto and aero both target lightweight, fuel efficient component and systems development with moves towards electrification.  Within Land Systems the focus is on population growth and urbanisation, with mining, construction and agricultural vehicles all using the same driveline technology developed in the auto division. In addition, 75% of sales from powder metallurgy are made to automotive customers.

Strategy and Strong Values

With so much talk about business ethics Nigel Stein, on taking over as Chief Executive from Sir Kevin Smith in 2012, sought to promote a well understood GKN ethic based on, ‘doing the right thing’.

Speaking to The Manufacturer in April 2013, about strategic positioning, he said, “Be leader in your chosen markets, have a global footprint with manufacturing in global locations. Have technology drive your margin. Have more than a commodity product to offer customers. Achieve operational excellence and outgrow your markets,” summing up neatly the five strands of the company’s strategic objectives aimed at delivering shareholder value through:

  • Leading in chosen markets
  • Leveraging a strong global presence
  • Differentiating the business through technology
  • Driving operational excellence
  • Sustaining above market growth

Driveline

With 2013 sales at £3,416m, GKN Driveline employs 24,000 people providing an extensive range of automotive driveline products and systems to leading vehicle manufacturers around the world, from 45 manufacturing locations in 22 countries.  Sales are split pretty evenly between Europe, Asia and the Americas. In recent years Driveline expansion has been focussed on emerging markets with over half of all light vehicle production now located in Asia. Increased consumer demand for AWD has led to rising demand for small sport utility vehicles (SUVs) and crossover vehicles.  BMW selected GKN Driveline to manufacture front Final Drive Units (FDUs) for a range of its X-series vehicles. FDUs form an integral part of the drivetrain enabling an innovative AWD for the X3 and X6 models. In Driveline the company is global leader in Constant Velocity Joints (CVJ) and AWD systems, having won business from BMW and Volkswagen Group, alongside protecting critical market share in the all-important North American market.

Aerospace

Representing £2,243m sales in 2013 and employing 11,700 people across 32 manufacturing locations, GKN Aerospace is a tier 1 supplier to the global aerospace industry.  With aerospace forming one of government’s 11 Industrial sectors this division of GKN is covered in the following review of this sector, one of the two highest growth sectors in the UK economy in 2013, according to statistics from Department of Business Innovation and Skills, July 2014. Over the years, GKN has been highly effective at repositioning out of military. Whereas 70% of aerospace sales were into the military ten years ago, today 75% of sales are into civilian markets.

It is a market leader in the manufacture of high value composite and metallic aerostructures and engine products, as well as transparency solutions and other niche technologies. Advanced design and manufacturing, continued innovation and strong customer partnerships have led to novel solutions, including extra-large cabin windows for the Dreamliner, together with advanced de-icing systems preventing in-flight build-up of ice on external aircraft surfaces.

Powder Metallurgy

Powder Metallurgy employs 6,600 people and generated £932m sales in 2013 across 34 manufacturing locations and comprises two businesses – Hoeganaes and GKN Sinter Metals. Hoeganaes is one of the world’s largest metal powder manufacturers and produces the metal powder that GKN Sinter Metals and others use to manufacture precision automotive components as well as components for industrial and consumer applications.

Land Systems

With 2013 sales at £899m, Land Systems employs 5,400 employees across 34 manufacturing and service locations as a leading supplier of engineered power management products, systems and services. It designs, manufactures and supplies products and services for the agricultural, construction, mining and utility vehicle markets and key industrial segments, offering integrated powertrain solutions.

Investment

Whilst reconciled to the often incompatible goals of investing over the longer term for the business to be competitive, and providing shareholders with near term returns, Nigel Stein, stated to The Manufacturer, 2013, “We have a very supportive shareholder base for our investment needs, they understand the GKN story. We discuss investment intent. Generally the UK focuses far more on the short term than the German Mittelstand companies who take a 10-20 year view. In our business we keep saying it can take us much as three years from winning an order to actually going into production. You have to have that long vision to deliver the performance you set.”

Market Proximity

With relationships to key customers and markets of such importance GKN continues to invest close-to-market, building its market leadership. Some recent highlights included opening a new purpose built aerospace facility in Bristol in 2012, which began manufacturing the first A350 XWB rear wing spar, and a new plant in Phoenix, US, to support Honeywell. GKN Aerospace was awarded the contract to produce the all-composite fuselage for the HondaJet light business jet and announced plans for a new aerospace facility in South Carolina, US, where assembly operations take place.

High levels of new driveshaft business in GKN Driveline led to the launch of an expansion programme in India, China and North America to increase capacity by 60% over the following four years. GKN has made two major acquisitions since 2012 – taking over Volvo Aerospace in July 2012 to deliver an aerospace engine division, and subsequently Getrag All Wheel Drive systems providing greater access to European and North American markets. The acquisition of Volvo Aero, the aero engine division of AB Volvo, made GKN Aerospace a global leader in aero engine components, with complementary technology and engineering that strengthened relationships with customers and enhanced its position as a leading tier 1 aerospace supplier. GKN’s capacity in Mexico grew as GKN Driveline commissioned its third precision forging press and GKN Aerospace established a new composite aero structures manufacturing facility.  The ground-breaking  new plant in Yizheng, with a capacity of 100 million components per year, signalled GKN Powder Metallurgy’s commitment to development in China. GKN Powder Metallurgy’s facility in Bonn, Germany, was expanded with the installation of state-of-the-art advanced sintering process equipment to manufacture high precision components used in electronic suspension for customers such as BMW, Mercedes and Jaguar Land Rover.

General Trends

GKN global market trends include developments around – lightweight materials, electrification, urbanisation, with world population growth forecast to reach nine billion by 2050, leading to an explosion in connectivity. Increasingly they see a move towards integrated solutions rather than stand-alone components.  Aircraft production is predicted to grow by 3-4% over the next five years and vehicle production by 3% to 87.3m units in 2014, with China growing at 9% and India at 5%.

People want to get more leverage from their investment. For auto OEMs this means more mega platforms and more modular designs,” says Steve Norgrove, VP Operations, GKN Land Systems.

The bits we do are becoming increasingly global, and tying into the big brands is very important so we can develop longer term relationships with them.  We are more and more focussed regarding our hardware offering. 

“It is an issue because we’re starting to see a process. There is a parallel with PCs. Everyone had an IBM PC which dominated the market in those early years. If you buy a PC it’s the Intel microprocessor inside that most people operate off. But now it’s about whose software you run.  That has become the power in the supply chain. It was an evolution from hardware, to chip, to software.

“Everyone who buys cars buys them as an emotional purchase and it’s about connectivity.  In the UK we are in the ‘hardware and chip place’, but ideally we need to be in the software place.”

Speaking on this issue, Phil Swash, immediate past CEO European Aerostructures, GKN Aerospace, recently transferred into Land Systems as Chief Executive, says, “Land Systems is a very traditional industry and very low risk. Typically it’s been about incremental innovation and what has happened is mostly on the software side of the business.

We recently acquired Williams Hybrid because the power will be hybrid and e-Power versions in future, using very different materials and very different coatings. E-Drive will give the farmer a connected vehicle. For example, if he has a faulty drive shaft, it will alert him, call up an engineer, order a new one. Whilst google and the Americans have the platform for the moment, for us at GKN we own all the embedded code in the hybrid, from the inverter to the evo to the hydro.

“We own all the IP and in the driveline which is bolting into a shaft, we own all the clutch electronics and all the systems transferring information to power and drive the car. OEMs sell the vehicle and stand behind the risk and obviously want some control of their systems. But GKN is pretty good at drawing the line between what is essential IPR for our business and what is needed to make a proposition marketable.”

Integrated Systems Solutions

With integrated systems complexity a growing feature for GKN, reflecting the demands from customers for the design and manufacture of efficient and sustainable solutions, the business is focussed on providing increasingly fuel efficient vehicles and aircraft, together with emissions reductions.

Integrated systems often involve long-term commitments in relation to warranties, funding, quality and safety, technical and customer requirements. ‘Content per vehicle’, or the amount of technology integrated within the drive shafts produced for each car is seen as a means of capturing and retaining market share.  However, ‘Risk and Reward Sharing Partnerships’ often  include a ‘pay to play’ approach, ‘not always within GKN management control’ and effectively used as a means for OEMs to drive competition between suppliers, pushing development costs down the supply chain.

Integrated solutions are used increasingly in safety critical applications where product failure could result in serious liabilities, warranty claims or product recalls with the potential to adversely affect GKN’s financial performance and damage reputation. The challenges for the business are around the risks associated with gaining these orders from OEMs. These include absorbing R&D, development, prototyping and trialling costs, as well as only receiving payment when the system is ultimately used, whilst also continuing to carry the risk of any ongoing performance failure.

Process Innovations

GKN’s Powder Metallurgy facility in Bonn includes state-of-the-art advanced sintering equipment producing high precision components used in electronic suspension for customers, including BMW and JLR, leading to increased freedom in designing and delivering lighter, stronger products with high durability at a lower cost.

GKN Land Systems, Bruneck, exceeded industry standards in customer quality by focussing on achieving single digit parts per million defects since 2011 when supplying its customers with more than 600k driveshafts each year.

Lean

GKN has built a strong reputation for lean, one of their strategic pillars, having adopted this across the group. In any plant in any one of 33 countries it is possible to talk to people who will have attended their lean training courses and be applying methods consistently across the globe.

R&D and Technology Development

Currently investing 3% of sales on R&D, Nigel Stein is focussed on moving this closer to 4%, having increased spend by 25% in his first two years at the helm.

The importance of knowledge networking is recognised with strong links in to the Technology Strategy Board and GKN regularly assesses how to share technology across the group by developing global partnerships with universities. Richard Parry Jones, director on GKN’s board and former Ford Chief Technology Officer, also heads up the Automotive Council.  The GKN Driveline Centre in Germany enjoys a close relationship with Aachen University and Powder Metallurgy works closely with Penn State University, whilst in the UK GKN collaborates with Bristol University on aerospace.

Advanced Projects are overseen by the iTechnology Strategy Board. For example they are moving into additive manufacturing or 3D printing to manufacture highly engineered metallic parts, some of which can only be produced using advanced netshape or 3D printing methods.

Steve Norgrove, says, “In UK plc we need to know how to work more and more collaboratively. The materials side is increasingly important. Some of the materials we are using are pretty short in world supply terms.  As a provider of powder metallurgy we make alloys with amazing qualities. And using netshape processes, rather than machining, is resulting in more efficient processes, better materials and we are making great improvements in additive layering, or 3-D printing. These are radically changing our capability to make new things possible. We are starting to see engineers think about structures much more organically and coming up with new design approaches that are remarkably close to nature, emulating muscle and sinew structures, for example.”

The 2013 Annual Report acknowledges that achieving target margins requires the development of best technology. By investing £30m during 2013, they were able to ‘offer something special to customers’, with examples including – AWD disconnect technology, currently approaching its launch with two prospective global customers in the pipeline; Design for Powder Metallurgy and gaining higher margin business within their aerospace division, where the company is leading in both aero structures and engine systems, through both its expertise in coatings and high strength products, positioning them as global leaders.

Supply Chains

So how might GKN play a part in coordinating responses to some of the bigger challenges facing the UK’s ‘hollowed out’ supply chains?

Steve Norgrove, VP Operations, GKN Land Systems, explains how recently appointed ‘Engineering Fellows’ could have a coordinating role across GKN. “Engineering Fellows are looking at leapfrog technologies,” he says. “Of course all businesses talk to customers who have to live ‘in the today’. But the supply chain now is very different from the supply chain of the 1960s. Then there were large companies who developed everything in-house for themselves with hundreds of people doing R&D.

“The automotive supply chain today is much more interdependent. There are start-ups and spin-offs where new breakthrough technologies are being developed, but these can be very fragile. We do need to nurture these. We are working smarter as a supply chain but we need to do more of it. We need to be more collaborative and shelter innovation.

“It is great to see government playing a more active role. TSB is doing some good work here. Sometime back I was involved as a Director of a business support organisation and as an industrialist I was struck by the over cautiousness when it came to allocating support to businesses. Risk averseness and overly bureaucratic procedures meant that it did not seem to be ‘enabling’ or have as much focus on outcomes as you would like to see.  But of course the whole area we are trying to support here is by its very nature risky.

When you get to a medium sized business then the procedures were even less flexible and there was less chance of support. So there is a lot more still to be done along with recognising that some of the key technological breakthroughs are not all in big companies.  Whilst government’s intentions are good it would still be good to have something more joined up.

“In aerospace the supply chain has been better coordinated for longer, primarily due to longer lead times, and they have done well in securing government funding assistance.  They are more geared up and used to more support.

Engineering Fellows and emerging talent

“GKN like most big businesses has a lot of knowledge in people who are nearing retirement age,” continues Steve Norgrove. “We all face a big challenge in bringing through the next generation.

“Engineering Fellows were set up as a Think Tank for the business, but they have found a real and additional role in inspiring the next generation. By putting young people alongside our Fellows, as highly experienced people who have often developed new products with many registered patents to their name, they gain instant respect from these young people who realise they have phenomenal knowledge and that they can learn a huge amount from them as well as gaining insights into the business and engineering. So they are making a great collective contribution to bringing young people through.

STEM and Creative Skills

“On skills there is a need for a broad perspective. We have lost a bit of balance,” observes Steve Norgrove. “Awhile back there was a push for everyone to get a degree. Education in general was and is, of course, considered a ‘good thing’.  My personal view is that it’s about balance; we need graduate engineers, technical engineers, metrologists – a range of practical and some more academic skills.

“The balance is achieved around mixing our ability to use people’s talents by combining academic and practical skills. The education system is more focussed on grades and forces people at an early stage into a template that doesn’t necessarily make best use of their talents.  To get vocational skills –technicians, maintenance, we used to be well served by the Vocational Colleges.   We do need STEM, but a more rounded practical understanding is really required.

“We get graduates in here and they are very bright, but practically they have a huge gap and without the practical understanding it is difficult to know what to do with their theoretical knowledge. They come into the business with aspirations to be MDs in a few years, and while this might be the case for some, for the vast majority will need to get their hands dirty so they really start to understand the business, the engineering, the materials and the customers.

“At GKN we have a huge interest in forging links with local colleges and universities, especially as it’s really about a blend of the vocational and academic. When we were at school we had woodwork and metal work which was different from STEM, but nonetheless important, and one could learn a great deal about how to manipulate and mould materials. Some people were phenomenal at this. We are losing the practical skills and for some people it is difficult for them to find their forte. We talk about customisation of services and products, but we don’t seem to be able to customise education.

People

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GKN takes culture seriously with Nigel Stein explaining, “GKN’s values run through the heart of our business. They guide our day-to-day activities and sustain our long term development.”  They have been summed up as ‘doing the right thing’,  with their 2013 Annual Report highlighting the need for high standards of business ethics and governance, teamwork and collaboration and a commitment to the communities where they operate.

GKN train their own people, recently launching their own apprenticeship scheme with 160 apprentices in the UK. They take part in ‘See Inside Manufacturing’ School visits to try to persuade more young people to come into manufacturing, as well as exhibiting at the Birmingham Made Me Design Expo 2013, promoted by Birmingham City University to drive deeper collaboration with industry.

Speaking to the CBI, Stein says, “We are lucky. GKN has a good brand name in the UK, and when we advertise for vacancies or open up apprentice schemes a lot of people apply.” But he is concerned about tier two and tier three suppliers that feed Tier 1 and OEMs, stating that there is still ‘a lot more to do to encourage a better reputation for careers in manufacturing to secure the future for these businesses’’.

Steve Norgrove adds his perspective on the challenges thrown up by emerging global trends in their sector and the need for fresh talent and insights, saying, “This will require a lot of free thinking people…Free spirits of enterprise, especially in the early days. They need to be very creative, producing products in a very different way. We work in a very structured way. But our young design thinkers need to be more commercial and very entrepreneurial. There is a real need to get creative subjects linked into commercial markets because at some stage you have to link to reality if you want to change the world. You do have to be anchored in the world where people want to buy something.

“Maybe industry has to think differently and take these young creative thinkers on. The other day we were debating whether we should be using more social media. Then we realised that those of us discussing this did not use social media and didn’t really know what we were talking about! We thought we ought to go and ask young people what they think and what they want. Because we do want young people to come and work here to see the great bits, the inspiring work that is changing people’s lives for the better.

“Most people are very adaptable when you put them into a different environment. But there is a lot of inertia in the system and it will take a great deal of effort to move this forwards.”

Education Collaborations

GKN receives funding from the Technology Strategy Board and Engineering and Physical Sciences Research Council (EPSRC).  Nigel Stein says, “There is a lot of funding available. One would always like more, but you have to recognise what is affordable. It is a case of making sure we’re spending what we’ve got to best effect, and sometimes in the UK things are slightly too fragmented. If you spread the money too widely, then nothing has the chance of keeping up with the competition – and this is about competition. Other countries are out there, and many of them are trying to do similar things.”( CBI Magazine, 25 July 2013)

Government Involvement

In his discussion with the CBI, Stein is positive about the Government’s Industrial Strategy. “It’s a good thing for the country. Both sectors (aerospace and automotive) are large contributors to economic activity in the UK and to the export activity of the UK. It’s encouraging how government and industry are working together to take the agenda forward.” However, he highlights the need for support to remain consistent and to last well beyond this government. He says, “Manufacturing is more long-term than politics….We need to have that commitment to purpose, that drive and willingness to succeed and be prepared to stick at it for a while.”

Summary

GKN plc, as a global engineering systems and components supplier, generates income from four major divisions – Driveline, Aerospace, Powder Metallurgy, and Land Systems, delivering £7.594bn revenues in 2013 and £484m Profit Before Tax.

Employing 49,500 people in 45 plants across 33 countries, the company has enjoyed healthy growth, very nearly doubling sales over the past six years, up from £4.4bn in 2009 to almost £8bn in 2013 and enjoying 10% growth year on year between 2012 and 2013.

GKN has focussed on building market leadership across all its businesses. Driveline is the global leader in Constant Velocity Joints (CVJ) and AWD systems and 40% of cars built today are fitted with GKN drive shafts. Over 90% of commercial aircraft taking off every day are powered by GKN technology.

Trends

GKN is focussed on developments around –lightweight materials, electrification, urbanisation, and with world population growth forecast to reach nine billion by 2050, leading to an explosion in connectivity.  Whilst these major developments require greater collaboration and coordination within supply chains with Tier 1 playing a major role, in fact market pressures are both incentivising this and working against it at the same time.

Industrial Strategy

Nigel Stein, Chief Executive is positive about the Government’s Industrial Strategy speaking to the CBI Magazine. “It’s a good thing for the country. It’s encouraging how government and industry are working together to take the agenda forward.” However, he says, “Manufacturing is more long-term than politics….We need to have that commitment to purpose, that drive and willingness to succeed and be prepared to stick at it for a while.”

Long term view

GKN through Nigel Stein has acknowledged the UK has a shorter term than the German Mittelstand companies, who take a 10-20 year view. “In our business we keep saying it can take us much as three years from winning an order to actually going into production. You have to have that long vision to deliver the performance you set.”

“People want to get more leverage from their investment,” explains Steve Norgrove. “For auto OEMs this means more mega platforms and more modular designs. The bits we do are becoming increasingly global, and tying into the big brands is very important so we can develop longer term relationships with them driving aspects of collaboration”.

Connectivity, Customisation and Control

In terms of increasing focus on customisation and electronics, google is the main driver.  “Most car companies don’t have the ability to do this bit. Everyone who buys cars buys them as an emotional purchase and it’s about connectivity.  In the UK we are in the ‘hardware and chip place’, but ideally we need to be in the software place,” says Steve Norgrove, VP Operations, GKN Land Systems.

Phil Swash, immediate past CEO European Aerostructures, GKN Aerospace, recently appointed as Chief Executive GKN Land Systems, explains that whilst google may have the platform for the moment, GKN owns all the embedded code in the hybrid, all the IP and in the driveline, all the clutch electronics and all the systems transferring information to power and drive the car, having taken the strategic steps required to protect their IP and market position.

Supplier Collaboration

Contract arrangements such as ‘Risk and Reward Sharing Partnerships’ often including a ‘pay to play’ approach, ‘ are not always within GKN management control’. These act as disincentives for greater collaboration as they are effectively used as a means for OEMs to drive competition between suppliers, pushing development costs down the supply chain. . The challenges for GKN is around managing the risks associated with gaining these orders from OEMs, through absorbing R&D, development, prototyping and trialling costs, whilst only receiving payment when the system is ultimately used, and continuing to carry the risk of any ongoing performance failure.

Cross Innovation

The importance of knowledge networking is recognised with strong links in to the Technology Strategy Board (TSB) with GKN regularly assessing how to share technology across the group and developing global partnerships with universities.

“In UK plc we need to know how to work more and more collaboratively. The materials side is increasingly important. We are starting to see engineers think about structures much more organically and coming up with new design approaches that are remarkably close to nature, emulating muscle and sinew structures, for example,” says Norgrove.

“The automotive supply chain today is much more interdependent. There are start-ups and spin-offs where new breakthrough technologies are being developed, but these can be very fragile. We do need to nurture these. We are working smarter as a supply chain but we need to do more of it. We need to be more collaborative and shelter innovation.

“There is a lot more still to be done along with recognising that some of the key technological breakthroughs are not all in big companies.  Whilst government’s intentions are good it would still be good to have something more joined up.

Emerging Talent

“By putting young people alongside our Fellows, as highly experienced individuals who have often developed new products with many registered patents to their name, they gain instant respect from these young people, who see how they can help develop their own careers. So they are making a great collective contribution to bringing young people through.

“My personal view is that it’s about balance; we need graduate engineers, technical engineers, metrologists – a range of practical and some more academic skills. The balance is achieved around mixing our ability to use people’s talents by combining academic and practical skills. The education system is more focussed on grades and forces people at an early stage into a template that doesn’t necessarily make best use of their talents.  To get vocational skills –technicians, maintenance, we used to be well served by the Vocational Colleges.   We do need STEM, but a more rounded practical understanding is really required.

“We get graduates in here and they are very bright, but practically they have a huge gap and without the practical understanding it is difficult to know what to do with their theoretical knowledge. We are losing the practical skills and for some people it is difficult for them to find their forte. We talk about customisation of services and products, but we don’t seem to be able to customise education.”

Whilst GKNs strong reputation means they can attract talent, Nigel Stein is concerned about tier two and tier three suppliers that feed Tier 1 and OEMs, stating that there is still ‘a lot more to do to encourage a better reputation for careers in manufacturing to secure the future for these businesses’.

STEM and Creativity

In light of global and the need for fresh talent and commercial insights it is perhaps time for a different approach to talent development in Steve Norgrove’s view. “This will require a lot of free thinking people…Free spirits of enterprise, especially in the early days. They need to be very creative, producing products in a very different way. Our young design thinkers need to be more commercial and very entrepreneurial. There is a real need to get creative subjects linked into commercial markets because at some stage you have to link to reality if you want to change the world. You do have to be anchored in the world where people want to buy something. Most people are very adaptable when you put them into a different environment. But there is a lot of inertia in the system and it will take a great deal of effort to move this forwards.

Conclusions

1) A longterm view is required within government to help support collaborative working within supply chains required to tackle the transformational opportunities that emerging technologies are providing for businesses, increasingly unable to take maximum advantage of these acting in isolation. This means stability of purpose and cross party consensus on the Industrial Strategy

2)Connectivity and customisation are expected by customers globally – this too is driving the need for collaboration but control of the web-enabled platform delivering the required connectivity resides with US companies, google, in particular – outside the UK and EU. However, GKN retains control of IP required to protect their market position. Understanding where control resides is a strategic driver for the UK and one which does not appear to have had sufficient focus.

3) Cross Innovation is acknowledged as increasingly important and GKN have created roles for Engineering Fellows to help this process internally. GKN are positive about government’s role in bringing together industrial partners and the public sector, but there is some way to go before this is fully joined up.

4) Emerging Talent needs to be able to combine the theoretical with the relentlessly practical as implementation is the nub of every business. Engineering degrees are seen as having become too theoretical and graduates leave university with unrealistic aspirations and without the necessary applied skills.  The company recognise the need to tell their story, by illustrating their achievements and bringing them alive and into the lives of people so they can begin to appreciate their the impact of the company’s many achievements.

5) Corporate and sector reputation is essential to attract the best talent. The image of engineering and the businesses within the supply chain needs to be more positively promoted.

6) STEM and Creativity – this is an essential combination for future competitiveness and taking advantage of transformational opportunities. Emerging design talent needs to be able to combine creative approaches with a real understanding of the commercial world because at some stage you have to link to reality if you want to change the world.