“GKN is 250 years on the market - we have had in the past many many challenges" - GKN Driveline CEO Peter Moelgg mounts strong defence of British suppliers business at Wintertest in Northern Sweden

“GKN is 250 years on the market - we have had in the past many many challenges" - GKN Driveline CEO Peter Moelgg mounts strong defence of British supplier's business at Wintertest in Northern Sweden

GKN Driveline says it is "very, very confident" its customers will continue to give full backing to the supplier as its parent Group battles a bid from manufacturing investor, Melrose.

The British supplier's confidence has also been boosted by today's (2 March) news it has received "a number of approaches" and confirms it has started discussions with Dana to potentially combine its Driveline business with the US component manufacturer mainly through equity.

To bolster its case to remain independent, GKN is forecasting sales growth from GBP33m (US$46m) to GBP500m by 2022, with its board 'unanimously rejecting the Melrose attempt, slamming it as "entirely opportunistic."

It also revealed 2017 organic sales growth of 9%, which it said was "significantly ahead of global auto production," helped by a broad geographic footprint and strong positions on high growth global platforms.

Part of this optimism surrounding Melrose's bid also comes from GKN's introduction of electric driveline technologies, while also investing GBP36m in R&D.

GKN Driveline's order book for electric driveline (eDrive) technologies hit a record GBP2bn (US$2.7bn) by the end of last year following a series of programme wins with global automakers.

The Melrose bid was bubbling away as GKN Driveline CEO, Peter Moelgg, showcased the supplier's new SUV technology research vehicle, highlighting its work in eDrive, All-Wheel Drive (AWD) and systems integration at its Arjeplog winter track in northern Sweden.

The Technology Demonstrator 2018 (GTD18) based on a Mercedes-AMG GLA 45, features mechanical and electric Twinster torque vectoring, a plug-in hybrid system and re-engineered control systems. Following initial testing at GKN Driveline's Lohmar R&D centre in Germany, the GTD18 started deeper validation and proof-of-concept demonstrations recently at the supplier's Wintertest facility in northern Sweden

"GKN is 250 years on the market. We have had in the past many, many challenges," Moelgg told just-auto during its Wintertest in Arjeplog just shy of the Arctic Circle. "We said Drive has a huge capability to renew and come up with solution.

"We have posted our defence plan an improved product and in that respect I am very very confident our customers will see GKN going forward in a very, very positive way...creating substantial value for the investor.

"Clearly there are discussions around, but they are very much on how to improve strategy and to have the commitments we are giving. The relationship with our customers is evolving very, very strongly.

"There are lots of OEMs approaching GKN: 'Could you study this, could study that?' Unfortunately we have to be very selective because the push in the industry is so high, you would run out of resources."

Responding to GKN's results this week, which showed 2017 Group profit before tax down 16% to GBP572m (US$786m), but its Driveline division showing organic sales growth of 9%, Melrose chairman, Christopher Miller had some typically robust counter views noting the statement was "full of long-term promises and more short-term actual misses.

"They include a rushed plan to demerge Aerospace and Automotive, which begs the question whether the priority of Project Boost has been superseded by the dismemberment of GKN in the next 15 months," added Miller.

"At the heart of this is a plea for the incumbent team to embark on an unproven and risky plan which we believe is wrong for all GKN stakeholders and UK plc as a whole."

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