GKN Aerospace, Kings Norton — House of Commons, 2019-04-24
Topic: Defense
Andrew George Stephenson (Conservative, Centre-right): The MOD shares my Department’s view that these job losses and this closure are highly regrettable but do not contravene the terms of the deed and the undertakings made during the takeover. Melrose agreed a deed with the MOD that includes clear obligations and commitments to maintain capacity and to support certain military goods, and requires that the Secretary of State for Defence be notified if Melrose plans to transfer production outside the UK. Melrose also made commitments to invest in skills and innovation, support sector deals, and support the supply chain during its ownership of the business Since the transaction completed, the Government have been monitoring Melrose’s compliance with the terms of the deal. My officials had a meeting with the company in October 2018 and will meet it again next month. Furthermore, on 1 April Melrose publicly reported that it is in compliance with the post-offer undertakings as required by the Takeover Panel. We are currently content that Melrose is compliant with the commitments that it made to the Government. Although GKN Aerospace’s decision is a huge disappointment for both the Government and the 172 staff members who will be affected, it does not contravene the commitments that were made at the time of the takeover The hon. Member for Birmingham, Northfield asked whether I had spoken to my colleagues in the Ministry of Defence; I have spoken to the Defence Procurement Minister, and he confirmed that they are content that Melrose has complied with its requirement under the deed with the MOD Prior to the Melrose bid, GKN had itself planned to restructure the business, which could have resulted in job losses, and intended to sell the entire automotive division to the US company Dana, which likewise might have decided to close UK manufacturing sites. The Secretary of State spoke to GKN Aerospace’s chief executive officer, Hans Büthker, and he informed us that the announcement does not in any way reflect a reduction in growth by the company. In fact, he said it is quite the opposite: the decision is the result of an internal strategic review by GKN to invest in high-value technology- driven production. That same review proposes to invest more in other UK sites. I understand that a meeting has now been arranged between the hon. Member for Birmingham, Northfield, the Secretary of State and the CEO of GKN Aerospace for further discussions on the matter, including on how we can best support his constituents who work at the site. I hope that will be an opportunity to discuss and explore alternatives to the site, and that that is something the hon. Gentleman can take forward from this debate As I mentioned earlier, GKN has confirmed that it will be doing all that it can to support the affected employees. We will continue to work closely with the company, the unions, the local enterprise partnership, the Mayor of the West Midlands Combined Authority, Andy Street, and councils to help with this effort and ensure that each and every worker is fully supported in finding new work Aerospace is one of our most rapidly expanding sectors and skilled and experienced employees are in strong demand. The UK aerospace sector is a great success story, and we punch well above our weight on the world stage. We are a world leader in the design, manufacture and maintenance of some of the most complex and high-value components of an aircraft, including the wings, engines, aerostructures and advanced systems. Our industry turns over £39 billion a year and the vast majority of what we make in the UK is exported globally Around half of the world’s modern passenger aircraft have wings designed and built here in the UK, and GKN Aerospace-manufactured products are on more than 100,000 flights a day. The hon. Gentleman asked what impact the closing of the Kings Norton site will have on the industrial strategy in Birmingham. Yesterday, I attended a meeting alongside five of my ministerial colleagues to discuss the midlands engine and the progress of our west midlands local industrial strategy. This will set out an ambitious long-term vision for the west midlands economy to increase productivity, drive economic growth, and support manufacturing and technology in both Birmingham and the wider region. The midlands has long been renowned as a hub for manufacturing, and it is not short of opportunities for advanced engineering jobs. More than a third of the UK’s automotive sector employment is in the midlands, and the region boasts many globally recognised companies, including Jaguar Land Rover, JCB and Rolls-Royce. More widely, the midlands is also home to the Manufacturing Technology Centre in Coventry, which operates some of the most advanced manufacturing equipment in the world The past year has seen the largest GKN Aerospace UK technology investment since 2012. This includes the announcement of a £32 million UK Global Technology Centre in Bristol and the large investments made to support its additive manufacturing capabilities in the UK—both have been supported by the Government through co-funded research and development grants. This co-funded investment will support GKN’s growth in the UK and will help safeguard and create high-value jobs in the company and its supply chain Hon. Members will be pleased to hear that GKN has also confirmed to us that there will further investment at some of its other UK sites, including those in Luton and Portsmouth, which will soon become technology centres of excellence. This comes on top of GKN’s recent announcement of £300 million in new investment to ramp up its activities in the fast-growing market for electric vehicles, something that I am sure the hon. Gentleman, as chairman of the all-party motor group, will welcome I can assure hon. Members that the Government will continue to support those affected by this site closure in the years ahead. Finally, I thank the hon. Gentleman again for giving the House the opportunity to debate this important issue Question put and agreed to.