Clark downed in UK dogfight
Government input ‘too little, too late’
BUNGLING Business Secretary Greg Clark has been blasted for making “weak” demands over the takeover of engineering giant GKN.
Desperate Clark urged Melrose – which buys ailing companies, shakes them up then quickly sells them on – to keep GKN’s HQ in the UK and “maintain a UK workforce”.
He also wanted the corporate raider to make long-term commitments to research and development if its £8billion bid succeeds.
But furious union chiefs said his move was “too little too late” after Melrose responded with promises lasting just five years. Clark’s intervention came just 48 hours before shareholders in 259-year-old GKN – which made Spitfires in the Second World War and cannonballs for the Battle of Waterloo – are due to vote on the offer. Critics want Clark to block the takeover on the grounds of national security.
Steve Turner, Unite assistant general secretary, said: “The assurances the Government claims to have secured are unenforceable, short-term and inadequate.”
And Labour’s Shadow Business Secretary Rebecca Long-Bailey said: “If the Government thinks today’s weak, late and unenforceable assurances from Melrose are sufficient they are deeply mistaken.”
Melrose’s swoop for GKN has turned into the most bitter corporate takeover fight for a decade.
GKN, based in Redditch, Worcs, employs 58,000 people in 30 countries and makes car parts for Jaguar Land Rover, Honda and Nissan, plus parts for plane maker Airbus and fighter jets.
But it became a takeover target after issuing a profit warning last October. Melrose chief Simon Peckham, responding to Clark’s demands, insisted: “We believe we are the right team to return this ailing business to once again become a British engineering and manufacturing powerhouse.”
Peckham is one of three Melrose bosses who could bank a £285million bonus bonanza by boosting GKN’s fortunes.
The shareholders’ vote on Thursday has been described as too close to call by City insiders.
GKN’S fate could lie in the hands of hedge funds that own a big chunk of the business.
Its largest shareholder is US investment titan BlackRock, which has ex-Chancellor George Osborne as an adviser.