GKN is a ‘tier 1’ supply chain manufacturer for automotive and aerospace with nearly 60,000 workers around the world, currently under threat of takeover by Melrose Industries.
IndustriAll Europe and IndustriALL Global share Unite’s deep concern that Melrose is a ‘turnaround’ company, which purchases firms to boost the share price and sell them at profit. Melrose has no experience in managing a business as large as GKN, or a serious plan for the long-term investment that is needed.
In a press release published on 5 February, Unite called on the House of Commons business, energy and industrial strategy committee to insist on a review of Melrose’s debt-fuelled takeover bid of GKN. It comes amid fears that the deal could damage the government’s industrial strategy and national defence interests.
As Britain’s largest union, Unite also raised concerns over Melrose’s bid with the House of Commons defence committee. Unite believes that if successful, long-term investment could dry up leading to cuts in research and development which would harm the UK’s current and future defence capability, as well as endanger jobs.
The General Secretaries of industriAll Europe and IndustriALL Global, Luc Triangle and Valter Sanches, reacted quickly to Unite’s plea for support by penning a solidarity letter in strong support of Unite’s position:
“It is extremely worrisome that Melrose’s bid is being funded by debt, which would be used to pay GKN shareholders an ‘exceptional dividend.’ GKN would then be saddled with the debt, meaning there’s no risk to Melrose, whose bosses would make £284 million in bonuses from the deal. The bid is purely focusing on share price, not underlying performance, which is strong in both GKN‘s Automotive and Aerospace divisions. What both divisions actually need is long-term investment, not two sets of management competing for the affections of investment funds by boosting the share price with cuts and restructures.”
Taking all of this into account, IndustriALL Global Union and industriAll European Trade Union urges its global and European network of millions of workers in mining, energy and manufacturing industries in Europe and worldwide to also oppose Melrose’s hostile takeover of GKN.