The union representing workers at GKN’s two Bristol factories called for tougher takeover laws this week after the government gave the green light to engineering group’s £8.1bn takeover.
Unite and Bristol politicians had urged Business Secretary Greg Clark to block the move by financial turnaround group Melrose on national security grounds amid fears that the move could threaten the future of the plants. 
But Mr Clark told Parliament that there were no grounds for intervention on that basis. He said: “On the basis of the commitments given relating to national security, the Ministry of Defence concluded that statutory intervention is not required.
“My judgment is that there are not reasonable and proportionate grounds to make a statutory intervention on the grounds of national security.”
His decision triggered an angry response from Unite, which represents many of the 2,000 workers at the GKN factories at Filton and Avonmouth, which make wing parts for Airbus and other major aerospace groups.
The union, Britain’s largest, said the “whims of short-term speculators and hedge funds” would “drive a coach and horses through the UK’s Industrial Strategy unless the government toughened up the UK’s takeover rules”.
Assistant general secretary for manufacturing Tony Burke said: “Time will tell whether the assurances given to Greg Clark and the Ministry of Defence by Melrose are worth the paper they are written on. There are still major question marks over the future of the workforce and job security.”
Unite said it would meet Melrose’s bosses and press for further detail over its plans and seek job guarantees.
During the bitter takeover battle, Melrose pledged to keep ownership of GKN’s aerospace division – including its massive Filton plant and smaller Avonmouth factory – for at least five years. It also vowed to maintain spending on research and development.
But Airbus, the Filton plant’s biggest customer by a huge margin and its former ownere, said it would look to source aircraft parts from other companies – dealing a potentially devastating blow to the factory, which is GKN’s largest.
Bristol North West MP Darren Jones – whose constituency includes the Filton plant – has called on the government to secure legally binding commitments for GKN on jobs and contracts, adding that failure to do so could be devastating for industry in North Bristol.
In a statement Melrose said, as a British company, it “worked in the national interest and remained wholly committed to protecting the UK’s national security”.
Chairman Christopher Miller added: “We have been in discussions for many weeks with government as to how best to cement our long-standing and clear undertakings and are grateful for their guidance. We look forward to continuing to work with the government as we return GKN to be a manufacturing and engineering powerhouse.”
Mr Clark is reported to have received commitments from Melrose that it would not sell any business working on projects affecting national security without the Secretary of State’s approval.
A high-profile campaign was waged by unions, MPs and city politicians, including the Mayor of Bristol Marvin Rees and West of England Metro Mayor Tim Bowles, during the takeover battle to urge GKN shareholders to reject the Melrose bid – the biggest hostile takeover in the UK since US giant Kraft snapped up chocolate maker Cadbury in 2009.
Melrose launched its bid for GKN after the historic manufacturer – which also makes car components – posted a series of profit warnings, mainly linked to its US aerospace business. Melrose, which had accused GKN bosses of mismanagement, claimed victory after receiving 52.43% of shareholder votes.
Melrose Industries was founded in 2003 to buy underperforming industrial companies and turn them into profitable businesses. It describes its approach as ‘buy, improve, and sell’ within three to five years. However, critics of its takeover of GKN described it as an “asset stripper”.
GKN invested heavily in the Filton plant since acquiring it from Airbus 10 years ago. It is now a global market leader in the design and manufacture of aircraft wing structures, making major structural wing sub-assemblies, precision machined components and advanced systems for all variants of Airbus aircraft.
It has also made parts for Dassault’s Falcon 5X super mid-sized business jet and Lockheed Martin of the US’s F-35 Lightning II Joint Strike Fighter – a contract that critics of the Melrose takeover say shows the deal has national security implications.
GKN’s state-of-the-art plant at Avonmouth plant makes world-beating composite wing sections for Airbus’s mid-range A350 airliner.
