Germany and France would never sell their industrial giants
As top British firm faces takeover, business chief warns...
A LEADING British industrialist last night urged the Government to halt the hostile takeover of defence giant GKN – saying it would never be allowed to happen in France or Germany.
Sir Richard Lapthorne, who led a report for the Government into the UK manufacturing industry, said ministers should think seriously about the impact of the takeover on the economy.
GKN makes parts for aeroplanes, cars and fighter jets, employing 58,000 globally including 6,000 in the UK.
But the 259-year-old firm is now fighting off a £7.4billion hostile takeover bid from predatory City turnaround group Melrose, which plans to sell it on at a profit within three to five years.
Sir Richard, credited with helping turn around major pillars of UK industry including British Aerospace, said: ‘The hollowing out of the British industrial base has gone too far. GKN is one of the remaining large manufacturers.
‘The Germans and French would not even dream of allowing this. Somebody has got to think, is this actually good for what we are trying to do with an independent Britain after Brexit?’
The 74- year- old, who held senior roles at Cable & Wireless, McLaren and Unilever, added: ‘Promoting the UK’s freedoms post-Brexit is all very well but it could be an illusion if we continue to lose control of decisionmaking at our major companies. Does anybody really think the French or the German governments would sit idly by watching the GKN story unfold in their jurisdictions?’
GKN has bases across the UK, and its parts are used in one in two cars on the road. It also makes parts for British military tanks, the F-35 fighter jet and the A400 aircraft carriers, among other key defence programmes. But there are fears it will sold off in chunks to foreign buyers, harming UK industry and defence products.
The Government is under growing pressure to intervene. The Commons defence committee is considering examining the bid. Industry analyst Howard Wheeldon said: ‘I fear that if Melrose get it, within a year we will see [GKN’s] automotive [arm] sold off to the Far East, because it’s a very valuable business.
‘And it’s a golden opportunity for aerospace and defence abilities to be sold to an American company, so we would lose the huge value of GKN to the supply chain.’
Unions waded deeper into the row last night, telling shareholders Melrose’s takeover would make GKN unsustainable and unstable.
Unite’s Steve Turner said: ‘This is the sort of casino capitalism our country can very well do without. ‘It is always people and communities who pay the price for the short-termism of the turnaround merchants … Melrose will promise the moon but will strip GKN of value for the future.’
On Tuesday GKN unveiled plans to sell off the firm’s powder metallurgy division as well as some smaller parts of the business.
Melrose has insisted it does not have a short-term business model, adding that it ‘builds businesses to long-term health and prosperity and has an impeccable pension track record’.