Historic British defence and automotive firm GKN has been acquired by asset-stripping firm Melrose in an £8 billion hostile takeover deal.
Used by the British motor industry in its heyday, GKN (formerly Guest, Keen and Nettlefields) was best known for its alloy wheels and overdrive units; nowadays, GKN Driveline still supplies components to the likes of Jaguar Land Rover and Ford.
Government ministers have reacted badly to the Melrose hostile takeover; given GKN’s position as the third highest-rated FTSE-100 rated engineering company in the UK, providing 6000 jobs domestically, the prospect of such a firm being broken up (Melrose’s mantra: ‘Buy. Improve. Sell’) has provoked controversy.
Speaking to The Guardian newspaper, Conservative MP Robert Halfon lambasted Melrose as “robber baron capitalism at its worst – many British jobs being destroyed by the few, corporate vultures plundering a company for short-term profits but long-term disaster.” The Daily Mail dubbed the deal ‘an abuse of capitalism’, while Labour leader Jeremy Corbyn added in a tweet that ‘Labour would have stopped the takeover of GKN [by Melrose]’.
You know things are bad when the Daily Mail calls out a rigged economic system.
The Tories have put the interests of city speculators over people’s jobs.
Labour would have stopped the takeover of GKN and in government we’ll make our economy work for the many, not the few.
— Jeremy Corbyn (@jeremycorbyn) March 29, 2018
Before it landed contracts with the likes of Aston Martin and British Leyland to produce cast aluminium alloy wheels, GKN’s subsidiaries were well invested in differential and overdrive production; having bought engineering firm Birfield in 1966, it gained access to Hardy-Spicer and Laycock respectively. More than two million GKN Laycock de Normanville overdrive units were fitted to British and foreign cars in period – and having stopped spares production in the mid Noughties, GKN’s parts supply was eventually bought by Californian firm Gear Vendors in 2008 and moved to the USA.
GKN Wheels and Structures no longer make parts for passenger vehicles – it instead concentrates its efforts on ‘off highway applications’ for the construction industry. Its recent multi-million pound investment in ‘Project Swan’, including its new factory in Telford, has been somewhat overshadowed by Melrose’s acquisition of its parent firm.