Unite on Melrose bid for GKN: Government last minute move ‘too little, too late’ - and assurances may not even be enforceable

Tuesday, 27 March 2018 11:17

Responding to the announcement today (Tuesday, 27 March) that the Secretary of State for Business, Greg Clark, has struck a deal with Melrose over the GKN bid, Steve Turner, Unite assistant general secretary for aerospace, said: "This may be too little too late from the government. The assurances that the government claims to have secured are unenforceable, short-term and completely inadequate. They seem to be more about getting this takeover off the ground than sustaining a long-term future for our aerospace industry.

"It is doubtful that even these limited assurances are worth much more than the paper they’re written on, or are actually legally enforceable by either the government or the takeover panel. No deal should be struck on the basis of false promises.

"It can take between five to fifteen years to develop, design and engineer a new product and get it to market. Any investor who understand the business and is in for the long-haul will see through this, however the government wishes to dress it up. Melrose, with its short-term, profit-first business model, is simply not a long-term investor.

"The fact remains that if the government wants this country to have an aerospace industry in ten, fifteen, twenty years to come, it has to stop this bid.

"There are also serious concerns that a Melrose takeover is not in the defence or national security interests of either the UK or its allies. The UK government has a responsibility to defend our national interests, to protect our current and future defence capabilities and listen seriously to growing concerns about this bid, not look to pave the way for it."

Tony Burke, Unite assistant general secretary for manufacturing, added: "Melrose’s assurances to Greg Clark are inadequate. Unite asked Melrose for assurances on job security and investment but it would not make the commitment to us.

"Greg Clark should have stepped in weeks ago as Unite asked and sought guarantees and assurances from Melrose.

"If GKN falls to Melrose on Thursday this will be a terrible blow to UK manufacturing and engineering. Any last vestige of a manufacturing strategy will be in tatters.

"It will also be further confirmation that our takeover laws are inadequate and leave good UK companies vulnerable to hedge funds and speculators.

"Eight years on from the takeover of Cadbury, businesses in this country are still too easily able to be destabilised by short-term profit-hunters.

"The government has sat back on the side-lines while the City operates like a casino in which jobs and communities are gambled away."

Unite has written to GKN shareholders (http://www.unitetheunion.org/uploaded/documents/letter411-33979.pdf) to urge them to reject the Melrose bid on the basis that it will see the company broken up and assets sweated to deliver profits to the shareholders, and that this undermines the UK's national security, defence and manufacturing interests.