MP urges GKN/Melrose to think again on closure of Kings Norton plant

Richard Burden, Labour MP for Richard Burden, will this evening raise the issue of GKN Aerospace at Kings Norton in an adjournment debate.

The following is an embargoed copy of his speech.

It is a year to the day since The Business Secretary made a statement to the House to tell us that while he would not intervene to block Melrose Industries’ hostile takeover bid for GKN last year, we could all take comfort in the legally binding undertakings the company had given him about the future.

Indeed, at the time Melrose were falling over themselves to assure everyone of their commitment to manufacturing in the UK.

For example, on 13th March 2018, Melrose Chief Executive Simon Peckham to my HF Leeds West as chair of the BEIS Select Committee setting out particularly clearly what they asked us to believe about their intentions when he said the company’s commitments included:

“Returning GKN to be a British Manufacturing powerhouse, competitive on the global stage”;

“Committed to innovation investing in skills, R&D, and productivity to support the Industrial Strategy”

And “Working with suppliers and customers to boost Britain’s Industrial base and the wider economy” [See note 1]

On 5th April, just over a year since Mr Peckham wrote this letter, workers at GKN Aerospace plant at Kings Norton in my constituency, were told what these assurances mean for them when GKN management announced that the plant is to be run down over the next two years and closed altogether in 2021 with the loss of over 170 jobs.

The company says that the work undertaken by the factory will be transferred to other GKN Aerospace sites or low-cost areas.

By low-cost areas, we can safely assume the company means overseas.

Of course, last year, Melrose had not only sought to assure the Select Committee of their intentions. They also provided a series of similar undertakings to ministers.

In his statement to the House on 24th April, one year to the day before this debate, the Business Secretary declared

I look to management to honour its commitments in both the spirit and the letter, and to create a strong future for GKN, its employees, its suppliers, and the industrial sectors in which it will play a major role,

Adding that

“Melrose has also agreed to meet my officials and me every six months to provide updates on its ownership pf GKN.

In the light of all that you might expect Ministers to have told the company this month that, rather than close Kings Norton, it expected the company to honour the spirit as well as the letter of the undertakings it had given.

Instead of that of that, however, in a Written Answer to me on 16th April, I was informed that the Secretary of State had been that the closure plan was the result of 'an internal strategic review by GKN' and that 'this is a commercial decision for GKN Aerospace and not in contravention of the deed of covenant agreed between BEIs and Melrose.'

So my first question to the Minister is this:

If Melrose have indeed been meeting his officials every six months as promised, has anything been said in those meetings about the future of the Kings Norton plant being in doubt?

If so, what alternatives to closure did BEIS urge on them and what was the company’s response?

If not, what on earth is the point of these six monthly reviews if they are not expected to cover an issue as important as the closure of a plant?

Of course, BEIS is not the only Government department with which Melrose entered a deed of covenant last year.

The Business Secretary also told the House last year that the Ministry of Defence had received undertakings that would

prevent the disposal of a business, components of a business or assets without the consent of the Government

The Kings Norton plant produces windscreens and windows for military as well as civil aircraft so can we assume that the MOD will now step in?

Apparently not. Written Answer from that Department on 15 April told me that as defence work is being moved, not stopped, the Secretary for Defence would not be issuing a note of concern under the covenant

I am assuming Minister spoken to his colleagues at MoD before this debate so can he tell me if GKN have made unambiguous commitment to retain all defence-related work undertaken by Kings Norton plant in the UK and what have they said about how they plan to dispose of Kings Norton Plant after closure?

No doubt when he replies to this debate, Minister will tell me about the various investments that GKN has announced in its Aerospace and automotive divisions at other plants in the UK

I welcome these investments. However, for employees at GKN aerospace Kings Norton, the first they knew that their company plans to close their plant was when they were told on 5th April this year.

That is simply not good enough and it is a breach of faith with what Melrose said last year.

If the company believe there is a profitability issue at Kings Norton, shouldn’t Ministers be telling them that the spirit of the undertakings given last year means they should discuss the situation and the options for the future with the trade unions representing their employees before decisions are made, not simply inform them after decisions are made?

And when Melrose said last year that their mission was to power the Government’s Industrial Strategy to secure (in their words) the best outcomes for employees, suppliers and customers and the wider economy, isn’t it reasonable to ask them what assessment they have made of the impact closing the Kings Norton plant on the local economy?

Has BEIS asked the company that question and, if so, what has been the company’s response?

In conclusion, therefore, I do not believe GKN now telling the Government that they have conducted a strategic review is satisfactory.

Will Ministers accept the need to press them further on:

How they have reached this decision?

What alternatives have been or still could be considered?

What in detail is going to happen to defence work carried out at Kings Norton and how does GKN plan to dispose of this asset?

And finally, what impact in practice will closing Kings Norton have on the Industrial strategy in Birmingham?

Without clear and convincing answers on these points ask Minister to join me in saying that Melrose and GKN should think again.