GKN PLC's (LON:GKN) incoming chief executive Kevin Cummings has been ousted as the group announced a further write-off at its US aerospace business in the wake a recent profit warning.
The automotive and aerospace components company said Cummings will leave with immediate effect, just weeks before he was due to take up the top job.
Shares fell 4.76% to 296.02p in afternoon trading.
Anne Stevens, a non-executive director of the board, will step in as interim chief executive from January 1 until a successor is appointed.
READ: GKN shares plunge on profit warning prompted by legal claims and US aerospace difficulties
Nigel Stein will continue as chief executive until he retires at the end of December, the FTSE 100 company said.
GKN said Stevens has extensive experience in automotive and aerospace industries having been chairman and chief executive of Carpenter Technology Corp, a specialty metals producer for the aerospace, transportation, medical and energy sectors. She also previously worked at Ford Motor Company for 16 years in a number of roles, including as chief operating officer for the Americas.
The appointment of Hans Büthker, the former boss of Fokker Technologies, as chief executive of the group’s struggling aerospace arm will be brought forward to take effect immediately.
Writedowns
In October, GKN warned that full-year profits will be just “slightly” higher than in the previous year after “disappointing” trading at its US aerospace arm and costs resulting from two legal claims.
A £15mln writedown was announced at its facility in Alabama and the company said it expects a “significant non cash-impairment charge” related to the US business.
“In light of the issues communicated earlier in relation to Alabama, a review of working capital has been initiated across other aerospace plants in North America,” GKN said in a statement on Thursday.
“While this review is not yet complete it is likely to result in a further write-off estimated to be between £80mln and £130mln, much of which built up before 2017.”
AJ Bell investment director, Russ Mould, said while the company has not given a reson for the departure of Cummings it "may or may not" be a coincidence that the company has announced an additional write-down.
Cummings joined GKN as the boss of its US aerospace business in 2008 and then took the helm of the whole aerospace arm in 2014 before being appointed CEO designate of the group.
“It is unusual for one FTSE 100 company to be in such a state of managerial flux, but we currently have two, if you include the London Stock Exchange which is readying itself to find a successor to Xavier Rolet," Mould said.
GKN its said guidance for the full year would remain unchanged. But Mike van Dulken, head of research at Accendo Markets, said "shareholder patience is threadbare with so much bad news overshadowing efforts to improve margins and cash flow".
GKN break-up rumours
GKN is reportedly considering splitting itself into two FTSE 100 companies by breaking up its aerospace and automotive units.
Sky News reported that the group is close to sealing a joint venture with China's state controlled civil aircraft manufacturer Commercial Aircraft Corporation of China, Ltd (Comac).
RBC Capital Markets said GKN's turmoil will fuel speculation of a break-up as it may been seen less attractive as a standalone business. “The turmoil may be seen by some as perhaps making a break-up more likely," said RBC analyst Wasi Rizvi.
"The appointment of an independent interim chief executive may also prompt some fresh thinking.”