Shares in GKN (GKN) were marked up on news that long-serving chief executive Nigel Stein is to hand over the reins to Kevin Cummings, who has led its aerospace arm since 2014. Investors will be grateful for the group’s share price performance under Mr Stein’s stewardship, but he will probably receive more kudos for the significant expansion of the engineer’s aircraft component business during his tenure. GKN also announced the departure of Adam Walker, finance director, who had been a candidate for the top job.
The appointment of an insider – Mr Cummings will take over in January – suggests a desire for continuity, but he will join at a time when GKN is evolving to meet changing client demands. There are increased price pressures in the aviation sector as the likes of Boeing and Airbus put the squeeze on the supply chain, while the group’s automotive technologies are adapting to an acceleration towards electric/hybrid motoring. GKN recently unveiled its advanced eTwinsterX electric axle concept for cars at the Frankfurt Motor Show and is busy developing electric drive train systems and aircraft technologies following the acquisition of Fokker Technologies Group and Volvo's aerospace business.
In a sense, and notwithstanding the group’s troublesome pension deficit, you could argue that Mr Cummings will be fighting a war on two fronts – it can’t be easy managing two such complex and rapidly evolving businesses. And this is part of the reason why speculation has persisted that the company will eventually be broken up into two separate entities, although the outgoing chief executive always scotched the rumours.
