Airbus refuses to back the sale of GKN to Melrose

Tom Enders, chief executive of Europe's largest plane-maker, told shareholders that despite efforts by Melrose to give reassurances about GKN's future it preferred to deal with long-term owners.

Many critics are concerned about GKN's future under Melrose because of its strategy of selling firms on at a profit, usually within three to five years, which could see GKN broken up and parts flogged off around the world.

GKN has a site in Telford where it employs almost 400 people as well as other factories in the Midlands with around 1,000 workers.

The warning from Airbus comes just weeks after it said it would find it "practically impossible" to give GKN any new work under short-term owners, and saw calls repeated for Business Secretary Greg Clark to step in and block the takeover.

Airbus employs around 10,000 people in the UK making wings for its planes, and about 2,000 GKN workers make parts for those wings. As well as the loss to GKN if Airbus switched supplier, there are concerns it could open the door to French and Spanish firms that are said to be desperate to scoop up more of Airbus's UK contracts.

Mr Enders told investors in Amsterdam: "We did not take a hard-nose decision yet, but we have concerns. It’s clear our aviation business is a long-term business and private equity is relatively volatile, short term. We certainly prefer industrial investors who commit to the business on a longer-term scale than on a short-term scale.

"But we have not blocked anything, we just raised concerns, and I'm sure those will be taken into account."

Melrose is taking over GKN after winning 52 per cent of shareholders' votes in a hostile takeover battle that ended on March 29.

Redditch-based GKN employs 58,000 people around the world, including 6,000 in the UK, making parts for cars, planes and fighter jets. The Government is now under pressure to intervene and block the takeover on national security grounds due to its work on the Eurofighter Typhoon, F-35 fighter jet and other defence programmes.

Steve Turner, the Unite union's assistant general secretary for aerospace, said: "Airbus is GKN's single biggest customer whose close working relationship on major civil and defence aerospace projects sustains thousands of highly skilled jobs.

"Airbus's repeated warnings should have alarm bells ringing furiously in Whitehall and highlights the need for Business Secretary Greg Clark to call the bid in."

Melrose has agreed to Government demands not to sell GKN's aerospace division for five years.