GKN boss evades questions on whether job numbers will grow as MPs grill GKN and Melrose execs

Lucy White
GKN is involved in the production of a number of military aircraft, including the Chinook programme (Source: Getty)

Top executives at beleaguered engineering giant GKN refused to confirm whether the firm would create more jobs if Melrose failed in its £7.4bn hostile bid.

When grilled by a committee of MPs, GKN's chief executive Anne Stevens said she expected the company to keep growing. Yet Stevens declined to directly confirm whether she saw GKN employing more or fewer people in a year's time.

"With the programmes that we have, we're still a growing company. If you have a growing company and a strong company with technology, you have jobs, and as you have more openings you hire people," she told the Business, Energy and Industrial Strategy (Beis) select committee.

Read more: Vince Cable to ask the government to stop any takeover of GKN after rejected Melrose offer

Stevens has been battling to retain control of GKN since turnaround investor Melrose said it could better drive improvements and boost value.

Yet Melrose's chief executive, chairman and vice-chairman were also made to squirm under questioning from the committee. CEO Simon Peckham had, during the meeting, promised to increase spending on research and development and up commitments to GKN's pension schemes.

But when questioned by Tory MP Antoinette Sandbach on why these commitments had not been drawn up into post-offer undertakings, or formal promises, Peckham was forced – after an uncomfortable explanation – into saying that he would consider firming them up.

The concession followed a letter written to secretary of state for business Greg Clark this morning from 16 MPs, urging government to block the Melrose bid.

Read more: GKN condemns Melrose's "low price and high risk" offer as it publishes formal document pressing shareholders to turn down the £7.4bn bid

Though jobs were a key focus of the Beis committee's questioning, the government can currently only intervene in takeovers on the grounds of national security, media plurality or financial stability.

Officials have already been scrutinising the deal through a national security lens, since GKN supplies components for a number of military aircraft, and Beis committee member Vernon Coaker alleged that Clark was "considering whether on national security grounds he should call this in and look at the proposed takeover".

But Melrose brushed aside any concerns that national security would be threatened by its ownership, or subsequent sale, of the business.

"We are not going to sell GKN military protected assets to anyone who is not an appropriate buyer," said Peckham.

Melrose confirmed that it had spoken with officials in the Pentagon and the Committee on Foreign Investment in the US to help allay their worries. But the firm came under fire from MPs as it conceded it had not yet met with union representatives.

Peckham promised to arrange a meeting "this month", though Unite's Steve Turner condemned Melrose as "asset strippers".

GKN's Stevens, who was joined by chief financial officer Jos Sclater, was also quizzed on her plans for dividing up the business. It emerged last week that the company had been approached by US group Dana for its automotive division, but Stevens did not elaborate on whether talks were progressing.

She added that the firm had received "many approaches" since news emerged of Melrose's interest.

Reaction to the committee hearing

Labour's shadow business secretary, Rebecca Long Bailey, said the evidence session "exposed how the big bosses of Melrose could receive large payouts if this takeover goes ahead".

"Melrose’s business model risks breaking up a company with a 250-year-old history, and in so doing undermining our industrial strategy and national security," she added.

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