August 02, 2005
GKL PLC Announces Major Layoffs in Outsourcing Move
In what seems to be a global epidemic among automotive and aerospace companies, GKL PLC has announced it will eliminate 2,500 jobs at its U.S. and French manufacturing plants. The company plans to outsource the work to firms based in Latin America and Eastern Europe. This move is part of a larger company plan to increase output in low labor cost areas while eliminating much of their workforce in first world nations. This strategy was made clear by a company report that indicated it planned to increase the production of transmission components by 70 percent in Mexico and 40 in Brazil by 2007, while simultaneously doubling production from existing plants in Poland and Slovakia. What is interesting about the move is not that the company is planning to allocate its labor in a more cost efficient manner, but the fact that the company is being so straightforward about the move. One could interpret this as an indication that the backlash against outsourcing is waning, but I think a more appropriate rationale is the shield offered GKN PLC by the industry it is involved in. With automotive firms throughout the western world struggling to achieve profitability, the general public has shifted to support the firms rather than simply their labor. MENAFN.com reports:
GKN recently announced the colusre of two U.S. plants and said Thursday it was thinking of closing a Florange, France, facility.
Read More: GKN outsourcing 2,500 jobs
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