{"id":14882,"date":"2018-03-27T16:04:30","date_gmt":"2018-03-27T15:04:30","guid":{"rendered":"http:\/\/unitelive.org\/?p=14882"},"modified":"2020-11-12T12:59:05","modified_gmt":"2020-11-12T12:59:05","slug":"melrose-inadequate-assurances-gkn-slammed","status":"publish","type":"post","link":"https:\/\/unitelive.test.igniteamt.com\/?p=14882","title":{"rendered":"\u00e2\u20ac\u0098Inadequate assurances\u00e2\u20ac\u2122 for GKN slammed"},"content":{"rendered":"
<\/div>\n

Business secretary Greg Clark today (March 27) stepped in over the GKN takeover bid from Melrose, just 48 hours before investors are to vote on the iconic engineering firm\u00e2\u20ac\u2122s future.<\/p>\n

 <\/p>\n

Investors face the choice of either approving the \u00c2\u01418.1bn debt-fuelled takeover \u00e2\u20ac\u201c which would see GKN placed under the auspices of \u00e2\u20ac\u0098turnaround specialist\u00e2\u20ac\u2122 Melrose, a firm known for restructuring businesses and selling them on for a profit only a\u00c2\u00a0 few years later \u00e2\u20ac\u201c or backing the long-term GKN management plan.<\/p>\n

 <\/p>\n

In a letter to GKN published today<\/a> (March 27), Clark sought assurances from Melrose if the takeover goes through over concerns Unite and others have raised over Melrose\u00e2\u20ac\u2122s intentions.<\/p>\n

 <\/p>\n

Chief among these concerns is the firm\u00e2\u20ac\u2122s commitment to UK industry, given GKN is a major engineering company employing 6,000 people in the UK alone.<\/p>\n

 <\/p>\n

In Melrose\u00e2\u20ac\u2122s response to the business secretary<\/a>, chief executive Simon Peckham gave only vague commitments and would not give assurances over jobs.<\/p>\n

 <\/p>\n

Unite assistant general secretary for aerospace Steve Turner called Clark\u00e2\u20ac\u2122s intervention \u00e2\u20ac\u015btoo little, too late from the government\u00e2\u20ac\u0165.<\/p>\n

 <\/p>\n

\u00e2\u20ac\u015bThe assurances that the government claims to have secured are unenforceable, short-term and completely inadequate,\u00e2\u20ac\u0165 he said. \u00e2\u20ac\u015bThey seem to be more about getting this takeover off the ground than sustaining a long-term future for our aerospace industry.<\/p>\n

 <\/p>\n

“It is doubtful that even these limited assurances are worth much more than the paper they\u00e2\u20ac\u2122re written on, or are actually legally enforceable by either the government or the takeover panel.\u00c2\u00a0 No deal should be struck on the basis of false promises.\u00e2\u20ac\u0165<\/p>\n

 <\/p>\n

Turner explained that the long-term nature of GKN\u00e2\u20ac\u2122s business \u00e2\u20ac\u201c designing and engineering a new product can take five to fifteen years to develop \u00e2\u20ac\u201c means that Melrose is not up to the job.<\/p>\n

 <\/p>\n

\u00e2\u20ac\u015bMelrose, with its short-term, profit-first business model, is simply not a long-term investor,\u00e2\u20ac\u0165 he said. “The fact remains that if the government wants this country to have an aerospace industry in ten, fifteen, twenty years to come, it has to stop this bid.\u00e2\u20ac\u0165<\/p>\n

 <\/p>\n

Turner added that there are \u00e2\u20ac\u015balso serious concerns that a Melrose takeover is not in the defence or national security interests of either the UK or its allies.<\/p>\n

 <\/p>\n

\u00e2\u20ac\u015bThe UK government has a responsibility to defend our national interests, to protect our current and future defence capabilities and listen seriously to growing concerns about this bid, not look to pave the way for it,\u00e2\u20ac\u0165 he said.<\/p>\n

 <\/p>\n

Unite concerns raised in House <\/em><\/strong><\/p>\n

Unite\u00e2\u20ac\u2122s concerns were raised today in the House of Commons during a debate<\/a> following news of the assurances the business secretary sought from Melrose this week.<\/p>\n

 <\/p>\n

Shadow business secretary Rebecca Long-Bailey demanded to know why Clark waited until the 11th<\/sup> hour to approach Melrose about last-ditch assurances, and she criticised him for not asking enough of the firm.<\/p>\n

 <\/p>\n

\u00e2\u20ac\u015bMany of the things the government asked for were weak and meaningless,\u00e2\u20ac\u0165 she said. \u00e2\u20ac\u015bFor example, when the government asked to maintain a UK workforce, what did they mean? Is one employee in the UK enough to fulfil this condition?\u00e2\u20ac\u0165<\/p>\n

 <\/p>\n

Long-Bailey agreed with Unite that most of the assurances given in Melrose\u00e2\u20ac\u2122s letter are not legally binding. Labour MPs during the debate pointed to the promises Kraft made when it took over Cadbury that were later broken.<\/p>\n

 <\/p>\n

Labour MP Jack Dromey, who has led the campaign in Parliament against the takeover, slammed what Melrose has offered so far \u00e2\u20ac\u201c only a five year commitment to the business in an industry that must think 15 years ahead; less money on research and development; no guarantee that all new business will be undertaken in the UK and no assurances over GKN\u00e2\u20ac\u2122s auto division Driveline.<\/p>\n

 <\/p>\n

\u00e2\u20ac\u0098Simply not good enough\u00e2\u20ac\u2122 <\/em><\/strong><\/p>\n

\u00e2\u20ac\u015bThis is simply not good enough \u00e2\u20ac\u201c and these are \u00e2\u20ac\u0098guarantees\u00e2\u20ac\u2122 that do not go far enough,\u00e2\u20ac\u0165 he said.<\/p>\n

 <\/p>\n

MPs reiterated Unite\u00e2\u20ac\u2122s concerns over national security, with Labour MP Wayne David noting that Melrose included only one sentence in its letter giving any assurances over defence. Other MPs highlighted Clark\u00e2\u20ac\u2122s powers to intervene in the public interest over defence concerns.<\/p>\n

 <\/p>\n

Clark told MPs that he would act under advice of the Ministry of Defence and other parties to determine later if he should block the takeover on national security grounds but did not give any indication when this would happen.<\/p>\n

 <\/p>\n

Unite assistant general secretary for manufacturing Tony Burke slammed Melrose\u00e2\u20ac\u2122s assurances to Greg Clark as \u00e2\u20ac\u015binadequate\u00e2\u20ac\u0165.<\/p>\n

 <\/p>\n

\u00e2\u20ac\u015bUnite asked Melrose for assurances on job security and investment but they would not make the commitment to us,\u00e2\u20ac\u0165 he said. “Greg Clark should have stepped in weeks ago as Unite asked and sought guarantees and assurances from Melrose.<\/p>\n

 <\/p>\n

“If GKN falls to Melrose on Thursday this will be a terrible blow to UK manufacturing and engineering,\u00e2\u20ac\u0165 Burke added.\u00c2\u00a0 \u00e2\u20ac\u015bAny last vestige of a manufacturing strategy will be in tatters.<\/p>\n

 <\/p>\n

“It will also be further confirmation that our takeover laws are inadequate and leave good UK companies vulnerable to hedge funds and speculators.<\/p>\n

 <\/p>\n

“Eight years on from the takeover of Cadbury, businesses in this country is still too easily able to be destabilised by short-term, profit-hunters,\u00e2\u20ac\u0165 Burke went on to say. \u00e2\u20ac\u015bThe government has sat back on the sidelines while the City operates like a casino in which jobs and communities are gambled away.”<\/p>\n

 <\/p>\n

Stay tuned on UNITElive for more after shareholders vote on the takeover on Thursday (March 29).<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Business secretary Greg Clark today (March 27) stepped in over the GKN takeover bid from Melrose, just 48 hours before investors are to vote on the iconic engineering firm\u00e2\u20ac\u2122s future.   Investors face the choice of either approving the \u00c2\u01418.1bn debt-fuelled takeover \u00e2\u20ac\u201c which would see GKN placed under the auspices of \u00e2\u20ac\u0098turnaround specialist\u00e2\u20ac\u2122 Melrose, […]<\/p>\n","protected":false},"author":2,"featured_media":12698,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[17],"tags":[624,867,865,690],"wps_subtitle":"Clark\u00e2\u20ac\u2122s intervention \u00e2\u20ac\u0098too little too late\u00e2\u20ac\u2122","_links":{"self":[{"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=\/wp\/v2\/posts\/14882"}],"collection":[{"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=14882"}],"version-history":[{"count":2,"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=\/wp\/v2\/posts\/14882\/revisions"}],"predecessor-version":[{"id":26307,"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=\/wp\/v2\/posts\/14882\/revisions\/26307"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=\/wp\/v2\/media\/12698"}],"wp:attachment":[{"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=14882"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=14882"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=14882"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}