West Midlands Mayor urges Government to consider halting GKN takeover battle
West Midlands Mayor, Andy Street has intervened directly with the Government over concerns regarding the future of regional engineering powerhouse, GKN.
Mr Street said claim and counter-claim in the tit-for-tat exchanges between the Redditch company and its potential suitor, Melrose, were doing nothing to allay the fears of workers already uncertain about what the future might hold.
He has urged a government review into the situation to see if the potential takeover should be halted.
In a letter to Business Secretary Greg Clark, Mr Street said outlines the importance of GKN to the West Midlands economy.
“GKN is a significant employer in the West Midlands, with over 1,000 workers at sites in Erdington, Kings Norton, Minworth and at the company’s headquarters in Redditch. It also forms a vital part of the automotive and aerospace supply chains for other West Midlands and UK firms. GKN is a long-term manufacturing success story in the region,” he states.
“The takeover bid by Melrose Industries has brought about legitimate concerns about jobs, pensions, skills, national security and research and innovation at GKN.”
Mr Street said he understood that the directors of GKN had proposed an ambitious transformation programme – dubbed Project Boost – in response to the bid, and that GKN’s workers and unions were committed to working with them to drive improved business performance.
Project Boost proposes the split of the Driveline and Aerospace operations into two separate companies and the eventual repayment of £2.5bn to shareholders.
“Given the importance of GKN and of these takeover concerns, I call on you and your department to review the bid by Melrose Industries, and determine if Government should halt the takeover,” said Mr Street.
He said he hoped any review of the matter would ensure:
• The jobs of GKN workers in the West Midlands and across the UK were protected
• Their pensions were protected
• That a vital engineering and manufacturing operation was retained in the West Midlands
• That national security was not compromised by any threat to GKN’s defence programmes (including consideration under the Enterprise Act 2002)
• That the future of long-term research and development investment, in technologies such as the “eAxle” and the “Wing of the Future” were guaranteed.
“Given our shared belief in the importance of Local Industrial Strategy to the West Midlands, I hope that you will take every measure necessary to secure the future of this great West Midlands-based business,” added Mr Street.