Around 2,000 Bristol aerospace workers face an uncertain future a week after engineering group GKN lost its bitter £8bn takeover battle with turnaround group Melrose.
Shareholders in GKN, which employs around 2,000 people making wing parts for Airbus and other major aerospace groups at its sites in Filton and Avonmouth, voted narrowly in favour of accepting Melrose’s offer. 
Amid fears that its new owner could look to sell off parts of GKN, Melrose has 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 & development.
But during the takeover Airbus said it would look to source aircraft parts from other companies – dealing a potentially devastating blow to GKN’s Filton operations.
There have been widespread calls this week for Defence Secretary Gavin Williamson to stop the takeover. But industry analysts have pointed to the fact that no recent takeover potentially seen as posing a threat to national security has been stopped. If Mr Williamson decides it could be a threat to national security it would the be up to Business Secretary Greg Clark to refer it to the Competition and Markets Authority.
The process involves a public-interest intervention notice compelling the CMA to produce a preliminary assessment. Analysts have pointed out that Melrose has already answered the questions that the CMA would pose.
Melrose announced it had acceptances from investors holding 52.43% of voting rights in GKN for its cash and share bid.
Its chairman Christopher Miller said the group intended create “a UK industrial powerhouse”. He added: “Let me assure you that GKN is entering into very good hands.”
But Bristol North West MP Darren Jones – whose constituency includes the Filton plant – said the government must secure long-legally binding commitments for GKN, adding that failure to do so could be devastating for industry in North Bristol.
TUC general secretary Frances O’Grady said the government had failed to protect GKN workers against what she called a predatory takeover. Ministers had become involved “far too late and effectively”, she said, adding that it made a mockery of government’s Industrial Strategy launched late last year.
The Filton plant, which GKN acquired off European aerospace giant Airbus 10 years ago, manufactures metallic wing parts designed at Airbus’s facility on the same site.
Last week’s decision came at the end of an increasingly heated two-month battle for control of FTSE 100-listed GKN, one of the UK’s largest and most historic engineering concerns whose interests include automotive as well as aircraft parts.
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, 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.
Many bid fear a similar outcome to the Kraft takeover, which resulted in the closure of Cadbury’s historic Somerdale plant near Keynsham with the loss of around 400 skilled jobs.
GKN has invested heavily in the Filton plant since acquiring it to develop it as 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 on the site.
GKN’s state-of-the-art plant at Avonmouth plant makes world-beating composite wing sections for Airbus’s mid-range A350 airliner. Such advanced technology is viewed as an integral part of the UK’s advanced civil aircraft wing capability – an important element of the government’s Industrial Strategy.
During the heated takeover battle Melrose bosses repeatedly claimed GKN bosses were mismanaging the company. In return those opposed to the Melrose bid branded the firm asset-stripper interested only in hiving off parts of the business to garner short-term profits.
GKN employs 6,000 people in the UK – around a third of them in its plants at Filton and Avonmouth. It also has automotive equipment factories in the West Midlands. Its total worldwide workforce is 58,000 strong.
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.
With Labour MPs and trade union officials lining up to criticise the takeover – and the government’s apparent inability to act – Unite union boss Len McClusky said the union would “hold Melrose’s feet to the fire” and seek concrete guarantees on jobs at GKN.
Labour MP Jack Dromey, who led the political opposition to the Melrose bid, called it a bleak day for British industry and said the government should now step in to block the takeover on national security grounds as GKN makes military aircraft components.
“Britain’s takeover rules are in desperate need of reform,” he said. “Yet again, as in the Kraft takeover of Cadbury’s, we have seen a jewel in the crown of British industry sold off because its shares were bought up by hedge funds.
“To let a 259-year-old British engineering icon like GKN be taken over by a short-termist, asset-stripper like Melrose is a monumental failure by ministers.”
