GKN shareholders urged to reject 'debt-fuelled' takeover
The bid for ownership of GKN would be paid for through hefty debts and damaging restructuring that would make the company unstable and unsustainable, according to union Unite.
The union today set out its fears about the company falling into the hands of acquisition firm Melrose in a letter to shareholders posted on the GKN website.
GKN has a major operation in Telford and employs about 340 people at Hadley Park, making structural parts including wheels.
In the letter, Unite urges GKN shareholders to reject the hostile overtures from Melrose, warning it would sell off aspects of the company and in doing so would damage GKN's status as a global leader in manufacturing innovation.
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The union also said Melrose's promise to put millions into the pension fund must be viewed with caution as it will be paid for through borrowing and job losses.
Unite also reveals that, according to figures produced for the union, Melrose will spend an estimated £83 million, before VAT and tax, in its efforts to acquire the centuries old GKN. The figure includes £6 million that will be spent on public relations.
Unite assistant general secretary Steve Turner said: "The sums of money that Melrose is prepared to spend to acquire GKN are astronomical.
"But make no mistake, this won't be Melrose's money they will be spending. Its plan is to load the business with debt to then sack workers and break up the company to pay back their lenders.
"This is the sort of casino capitalism our country can very well do without. It is always people and communities who pay the price for the short-termism of the turnaround merchants.
"We urge GKN shareholders to take a longer view about the business and understand that Melrose will promise the moon but will strip GKN of value for the future."
Unite assistant general secretary for manufacturing Tony Burke added: "To stop this Melrose juggernaut crashing through one of the UK's oldest engineering companies, we will need the government to get off the fence and act.
"This is a test of the government's commitment to make a success of its industrial strategy.
"In GKN, we have a world leader in automotive and aerospace technology where investment, research and development are planned over a time span of 15 to 20 years. In contrast, Melrose is in business for a quick profit and have no long term commitment to the UK manufacturing base.
"The business secretary Greg Clark has the power to intervene on the basis of national security concerns posed by this hostile bid. We would argue that such are the threats to jobs, communities, UK manufacturing and the state that this power to intervene has become a duty to do so."
The Unite letter has been agreed by representatives of the union's members from across all GKN UK sites.
