The engineer said its so-called ‘Project Boost’ transformation plan will “fundamentally improve” the cash position and margins of its automotive division, GKN Driveline.
By the end of 2020, the company expects Driveline to achieve £153mln of recurring annual cash savings and is targeting a trading margin of more than 9.5%.
It plans to automate and digitise operations within Driveline, which is expected to improve productivity, quality and safety.
GKN is splitting its automotive and aerospace division into two.
GKN has been trying to reassure shareholders of its ability to turnaround the business as it tries to fend off a hostile takeover approach from turnaround specialist Melrose.
Melrose offered £7.4bn for GKN in January but the engineer has recommended shareholders vote against the deal because it believes it undervalues the firm.
Shareholders in Melrose approved the deal on Thursday and the European Commission has given it anti-trust clearance.
eDrive revenues expected to rise
GKN said a strong performance in its electric driveline unit, eDrive, will boost results with revenues forecast to reach £500mln by 2022.
The division, which makes parts for BMW and Volvo, has a £2bn order book from global original equipment manufacturers.
In China, its joint venture with Hasco –Shanghai GKN Huayu Driveline Systems – will implement a separate transformation plan aimed at maintaining its strong margins.
GKN says strategic plan on track
The group said GKN Driveline now has the “capability and the strategic focus to capitalise on its investments and deliver substantial margin improvements and cash flow to shareholders”.
"Our Driveline business is perfectly positioned to take advantage of the changing automotive market,” said GKN chief executive Anne Stevens.
“We will continue to develop and deliver the technologies that will enable our customers to succeed while realising the full value of our business."
GKN continues to fight against Melrose bid
The news comes after bosses of GKN and Melrose addressed lawmakers at a UK parliamentary hearing on Tuesday amid concerns about the proposed takeover.
Stevens told MPs that GKN has received many approaches from other companies since the offer from Melrose.
Melrose chief executive Simon Peckham tried to soothe worries that the company would break up GKN into pieces before selling it off. He told lawmakers Melrose would not sell GKN’s protected military assets to anyone who is not an appropriate buyer.