Melrose accused of betrayal on job losses

INDUSTRIAL giant Melrose is accused of breaking promises made at the time of its £8bn hostile takeover of engineer GKN after revealing plans to close one of its aerospace plants with the loss of nearly 200 jobs.

Staff at the site in King’s Norton, Birmingham, were told on Thursday that the factory, which makes windows and canopies for aircraft, will shut in 2021.

The move comes as Melrose looks to squeeze more profits out of the GKN, which it bought last year after a bitter, hostile takeover.

To seal the deal, Melrose gave a series of binding undertakings, including that it would not sell the aerospace business without the approval of ministers. Melrose also pledged to invest as part of its turnaround strategy to boost profitability.

Staff are understood to have been told that the factory’s work will be transferred to “other UK plants and low-cost areas”. GKN has a plant in Alabama, which has a growing aerospace industry and enjoys cheaper labour costs than the UK.

Richard Burden, the local MP, said: “Employees have been told that this is nothing to do with the Melrose takeover of GKN but it seems to drive a coach and horses through the undertakings Melrose gave. It’s a breach of faith, though it might not breach the exact wording of the undertakings given.”

A GKN spokesman said the company had “regrettably concluded” that the factory “does not have a long-term, sustainable future within the business”.

He added: “By taking this difficult decision now, we will be able to carry out a carefully managed site winddown process over a period of more than two years, leading to expected closure in 2021.”

A Melrose spokesman insisted that the closure “is not a Melrose plc decision. It is entirely the decision of the GKN Aerospace management team”.