Britain’s largest union, Unite, has warned that the formal hostile takeover bid of GKN by Melrose was ‘debt fuelled’ and marked a return to 1980’s cowboy capitalism.
Urging the secretary of state for business, Greg Clark, to intervene, Unite assistant general secretary, Steve Turner, said: “Melrose’s bid is a return of 1980’s cowboy capitalism. It should have no place in our cutting edge engineering, aerospace and automotive sectors.
“If Melrose succeeds in its bid by borrowing vast sums of cash to fund a short-term bung to shareholders, GKN, which is a central supplier to our national security strategy, will be saddled with huge levels of debt and instability.
“The truth is that UK takeover law is too flimsy to prevent this sort of predatory bid from Melrose; it would not happen in France, for example. That is why the secretary of state for business, Greg Clark, must use the unique powers he has to block the sale.
“In the wake of Carillion, the case for intervention is clear. While Melrose bosses stand to rake in a massive £284 million in bonuses if the deal goes through, it will be workers who will pay the price with their livelihoods and potentially their pensions, as parts of the business are asset stripped and sold off to pay for the debt.
“This is a deal aimed at turning a fast buck for the few in the short-term. It does nothing to build a stable, secure future for a great British company whose highly skilled workforce lead the way in electric vehicle development and aerospace engineering.
“Because of the defence work GKN delivers, the UK government can and must use its power to intervene in the national interest and stop this deal going through.
“Unite is pulling out all the stops to oppose this bid, as well as seeking concrete assurances from the current management. We will not allow two sets of management to compete for the affections of shareholders by promising faster and deeper cuts. For Unite, defending jobs always comes first.”
