Shropshire Star comment: Die is cast over GKN takeover
The die is cast. Now Telford has to wait.
The hostile takeover of GKN, a firm which is in the industrial DNA of Shropshire, has caused widespread concern about what the consequences will be for the region, the 400 workers at Hadley, and the 1,000 elsewhere in the Midlands.
Calls for the Government to intervene drew assurances that the situation was being monitored, but also less reassuring noises that it was a commercial transaction and the Government was not going there.
Turnover specialist Melrose has now sealed the £8.1 million deal after Business Secretary Greg Clark gave it the green light, refusing to intervene on the grounds of national security.
It would have been a surprising precedent if he had done. Melrose is not a foreign firm, so the defence activities of GKN are passing into British corporate hands, rather than foreign hands.
The undertakings given to the Ministry of Defence are, however, not going to see Telford workers sleep more easily in their beds because they themselves are not involved in the defence arm. The Hadley Castle Works is a wheels and structures plant.
What happens now? We know what Melrose does is all about because it is open about it. It turns around companies which it thinks are underperforming. It then sells them and returns the proceeds to shareholders.
So there is a scenario in which Melrose will reinvigorate GKN which can be seized upon by optimists. For the pessimists, there is an alternative scenario in which it “improves performance” by slashing jobs and shutting plants and then flogs off the juicy bits before disappearing over the horizon having become a lot richer all round.
If this is the outcome it will strengthen the hand of the union Unite which wants takeover laws to be beefed up. The union is already trying to secure job guarantees from Melrose.
If the worst fears are all realised any such tightening up will unfortunately come too late for the GKN workers. A lesson will have been learned, but from their point of view the damage will already be done.
The damage will impact on the area as well. Anyone who worked at Sankey’s at Hadley in years gone by will know that things there now are not what they used to be, when it had a magnificent football pitch, thriving social scene, and busy ballroom – it was not a works, but a works community.
GKN is part of Shropshire’s industrial heritage and with the Melrose takeover its fate now lies in the hands of “outsiders”, which is not very comforting.