On GKN’s website we are told that the the company is “a global engineering business. Every time you travel by road or air almost anywhere in the world it is likely that GKN is helping you on your way. We design, manufacture and service systems and components for original equipment manufacturers around the world.”
The company, which employs 58,000 globally and 6,000 in Britain, works with Airbus and Boeing on defence projects and supplies equipment to the RAF and the army, whilst its automotive division supplies parts to around half the companies manufacturing cars and trucks.
But right now all is not well with GKN.
Rumbling financial problems at the global company came to a head in the US aerospace sector when news broke at the end of 2017 that the company “would have to write off mountains of overvalued inventory and unpaid bills”, revealing a black hole in the company’s finances that gave shareholders the jitters.
Subsequent panic-stricken management switches failed to calm nerves, exposing the whole of GKN to a series of hostile bids from Melrose, a band of British vulture capitalists.
Melrose specialises in sniffing out businesses in trouble, breaking them up and selling parts quickly on. Unite calculated that if Melrose’s hostile bid succeeded GKN would end up over £1.3bn in debt.
Hoping to forestall this ignominious conclusion to an industrial career that began in the 18th century, GKN first announced plans to hive off its automotive division, then days later proposed that said division be merged with Dana, a company with which GKN had previously collaborated.
Whilst some saw this as a smart move by the GKN board, others cautioned that separating the automotive from the aerospace sector could weaken the ability of the latter to resist being snaffled up in a future hostile bid.
And any notion of Dana as a knight in shining armour come to rescue the workforce from the clutches of the Melrose vultures was rapidly dispelled by a glance at Dana’s own past behaviour.
When Dana previously went bankrupt in 2006, it “offloaded four defined-benefit schemes into a new vehicle”, two of which subsequently went into the Pension Protection Fund, resulting in 3,000 workers facing a cut in their pensions. This was criticised by the Pensions Advisory Service as “little more than asset stripping”. (New pension questions are raised in GKN battle by Alex Ralph, The Times, 15 March 2018)
Undeterred by the Dana manoeuvre, Melrose made its final bid for the whole of GKN and won a majority of shareholders in favour. Melrose won the day, relying largely on the votes of get-rich-quick speculative investors riding in on a tide of borrowed capital.
In the end, whatever the fatcat shareholders had decided about the Melrose bid, what these events reveal is that the fate of thousands of workers depends upon decisions taken in boardrooms and back offices by managers, bureaucrats and shareholders for whom nobody voted.
These decisions will affect not only the jobs and pensions of those employed directly by Melrose, but will also have a knock-on effect on those working for plants relying on parts and systems supplied by GKN such as Toyota and Jaguar. This is the real face of British ‘democracy’, in which the lords of capital dictate the whole productive existence of society on a throw of the dice.
Workers need to organise to defend their jobs, their pensions and their rights. Resistance to capitalism will flourish when it is fought out as class against class, not as a question of ‘British jobs’ versus ‘foreign jobs’, and certainly not in the interests of ‘national security’ versus the world.
Predictably, though, this last was the tack steered by Unite the Union, which agonised along with the Daily Mail and the rest that “because of GKN’s defence work our national security could be at risk”. (Stop the GKN takeover; bad for workers, bad for business)
