It’s in our interest – and the UK’s – to look at GKN takeover

region – think of GKN’s head office, GKN Freight Services, GKN Aerospace Services, GKN Driveline, GKN Driveline Services and – still in the Midlands - GKN Wheels & Structures.

Locally, GKN employs lots of workers, sources components from supply chains locally, delivers exports for the region, supports key firms like Jaguar Land Rover in producing world-class cars and invests very heavily in the future driveline technologies needed in electric cars.

More broadly, an independent study in 2015 found that GKN contributed a total of £1.3 billion to the UK economy that year.

Today, GKN has 14 sites employing nearly 6,000 people in the UK, with UK sales of more than £1 billion.

Councillors Ward and O’Reilly are also right to highlight GKN Driveline as the jewel in the crown of GKN’s UK operations, employing 850 people in Birmingham, with sales of £195 million last year to leading global auto firms. Separating and breaking up GKN will lead to the bits being themselves broken up and destroyed.

GKN Driveline in Erdington would quickly disappear, I fear. There would be little point in, say, a Chinese owner assembling component parts here. Another lift and shift looms.

Aerospace would quickly be taken over too, some 116 years after Guest, Keen and Nettlefold merged in 1902.

This wouldn’t be happening in France or Germany.

And it doesn’t have to happen here. Section 58 of the 2002 Enterprise Act allows for the Secretary of State to intervene in mergers where they give rise to certain specified public interest concerns, including issues of national security.

GKN has extensive military aerospace involvement, including Lockheed Martin (F-35 Lightning II (JSF), F-22 Raptor), Boeing (F-15 Eagle, F/A-18 Hornet, AV-8B Harrier II), Eurofighter (Typhoon), Panavia (Tornado), Saab (JAS-39 Gripen F35) and its RM12 engines, and the new B21.

Given this military involvement, the United States is highly likely to review any GKN takeover via its Committee on Foreign Investment in the United States (CFIUS) provisions.

The UK could and should do the same.

The Public Interest test applies here under the national security element of Section 58 and the UK government has the power to consider the takeover and whether it is in the public interest. Given the importance of the firm to the region’s economy and given the Prime Minister’s stated view on takeovers, this is a key test of the Government’s industrial strategy.

It’s time to put long-term investment ahead of short-term speculation.

So well done Councillors Ward and O’Reilly. In contrast, it’s disappointing the West Midlands Mayor Andy Street seems so reluctant to highlight GKN’s importance to the regional economy and to call for existing powers to be used to review the bid.

A great Midlands-based engineering firm is at risk of being dismembered and sold on by Melrose.

Councillors Ward and O’Reilly are right to urge the Business Secretary to examine the takeover on national security grounds. In so doing, they are speaking up for the city and region. As West Midlands Mayor, Mr Street should surely be doing the same?

It’s time to put long-term investment ahead of short-term speculation

Prof David Bailey works at the Aston Business School in Birmingham