Britain’s largest union, Unite, is calling on the House of Commons business, energy and industrial strategy committee to insist that the business secretary, Greg Clark, calls in and reviews 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.
The call comes ahead of a meeting on Wednesday (7 February) with the business secretary, Greg Clark, where Unite workplace representatives from GKN will urge the secretary of state to use his powers under the Enterprise Act (2002) to block Melrose’s bid in the public interest.
Under the Act, the secretary of state can intervene in mergers where they give rise to certain specified public interest concerns, including issues of national security. GKN is a major defence partner to Airbus and Boeing and supplies and maintains UK defence equipment used by the Royal Air Force and the Army.
Unite is also raising its concerns over Melrose’s bid with the House of Commons defence committee and the secretary of state for defence, Gavin Williamson. 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.
Commenting, Unite assistant general secretary, Steve Turner, said: “The House of Commons business committee needs to insist that the business secretary, Greg Clark, urgently calls in and reviews Melrose’s debt fuelled bid of GKN.
“Melrose’s bid, which is based on borrowing vast amounts of cash to bung to shareholders, will see GKN saddled with £1.3 billion of debt in a move harking back to the ‘cowboy capitalist’ takeovers of the 1980s.
“The short term financial engineering of Melrose’s bid is totally at odds with the long term approach and investment that is needed to power the government’s industrial strategy.
“Because of GKN’s extensive defence work, the bid also raises serious questions about UK defence interests and capability. Aimed at turning a quick buck, there is a real danger that if the bid is successful, long term investment will dry up, leading to cuts in research and development and the UK’s defence capability being harmed.
“When they meet him, Unite workplace representatives will be asking the business secretary, Greg Clark, to use the power he has to act in the national interest and intervene to block this bid, as well as strengthening takeover laws to ensure public and social interests are put first.
“The business secretary cannot duck his responsibility. He needs to act in the national and public interest and block this bid which will ultimately result in parts of successful engineering being atomised and vital engineering skills and expertise lost.”
