Melrose narrowly won the day but will face a tough time convincing customers and workers to play ball
Say goodbye to one of Britain’s oldest manufacturers.
GKN, which once made the Spitfire, in the end failed in its own Battle of Britain against the barbarians at its gates.
Melrose, a financial engineer that buys real engineers for the purposes of shaking ‘em up and selling ‘em off, has won the companies’ bitterly contested takeover battle in a squeaker, securing the support of a shade above 52 per cent of GKN’s shareholders.
Read more
- Melrose takeover offer approved in GKN shareholder vote
- Why Melrose’s takeover of GKN is so important to the UK
- Airbus warns it won’t give business to GKN if Melrose deal goes ahead
The real winners, however, are the casino capitalists that poured in, placing big bets on a Melrose victory. The debate around GKN’s problems and who might be best to fix them meant nothing to them.
Having delivered victory and turned their quick buck they will be off to the next project while GKN’s other stakeholders; its employees and its customers in particular, are left to pick up the pieces.
Melrose will have to keep hold of the thing for five years, but then it too will be free to walk away after having squeezed out as much cash as possible out of it.
The problem with this approach, as no less a figure than former Defence Secretary Lord Heseltine made clear, is that military contracts, which make up part of GKN’s business, are a long term game.
Much of the rest of the world looks on incredulous when situations like this occur. Other countries simply wouldn’t countenance something like this happening at such a strategically important company.
Plenty of GKN’s customers have made that point. Some, like Airbus, publicly, others in private.
Melrose is going to have its work cut out to convince them to keep playing ball. It could also face difficulties with unions. The way Melrose has dealt with the representatives of GKN’s highly skilled workforce to date has had the effect of making a bad situation worse.
If the company can’t change the narrative, and quickly, its victory will prove to be a pyrrhic one.
Business news: in pictures
Business news: in pictures
-
1/9
Amazon's new Seattle headquarters mimics a greenhouse, with 40,000 different plants aimed at boosting workers productivity
REUTERS
-
2/9
Trinity Mirror, which owns the Daily Mirror, is set to incorporate the parent company of the Daily Express, Sunday Express and the Daily Star. Trinity Mirror stated on Friday that it was buying all of Richard Desmond‘s Northern & Shell’s publishing assets for £126.7m.
Getty
-
3/9
Kylie Jenner tweet about snapchat wiped $1.3bn off the stock market value of Snap on Thursday
-
4/9
RBS recorded its first profit since the 2008 financial crash – some way since Fred Goodwin (pictured) felt the heat in the aftermath of the bank's bailout
-
5/9
Samsung heir Jay Y Lee was freed from jail on Monday. He was convicted for corruption and embezzlement with South Korea's former president in 2017.
-
6/9
The total number of electric buses in service is forecast to more than triple, from 386,000 last year to about 1.2 million in 2025, equal to about 47 per cent of the worldwide city bus fleet, according to a report from Bloomberg New Energy Finance
-
7/9
Aldi has removed thousands of kilos of vegetables after a customer complained that she had found part of a rat in one bag of frozen mixed greens. It came after Aldi customer Pat Batemen complained to the budget supermarket chain and was offered £30 compensation, a figure she said was later increased to £500.
-
8/9
Coronation Street is set to get its own Co-op supermarket and Costa Coffee branch in a landmark deal that will see shop fronts appearing on a show as product placements. Viewers of the ITV soap will see both stores open on the street this spring. Co-op's and Costa Coffee's facades will be seen on the show, alongside branded posters, bags and cups used by Coronation Street characters.
-
9/9
John Lewis, M&S, Next, Debenhams and Sainsbury’s are all yet to add their names to a list of brands binding themselves to Bangladesh’s latest laws on fire and building safety. The renewed agreement will see greater investment in health and safety checks come into effect this year as the original 2013 agreement is due to expire in May.
REUTERS
Meanwhile, the Government’s alleged commitment to interventionism, its promises to reverse decades of under investment and short term thinking that have dominated Britain for so long, have been brutally exposed.
The limp concessions extracted from Melrose by Business Secretary Greg Clark, who only woke up to what was going on a couple of days before the end, are, as I explained in an earlier column, little more than fig leaves designed to cover up the fact that the government’s industrial policy is a sham. The pinstripes of the City rule over the manufacturer’s overalls every time.
If there is one consolation to draw from this deeply depressing, and regrettable outcome, it is this: The widespread anger that has been provoked may finally prompt a rethink when it comes to takeover rules that so easily facilitate bad bids. If Melrose finds GKN mark 2 harder to accomplish as a result, something may yet be salvaged from this sorry affair.
- More about:
- GKN
- Melrose
- Greg Clark
- takeovers
Reuse content Read the Original Article
