Proposed closure of GKN Automotive plant in Birmingham
A Westminster Hall debate on the ‘Proposed closure of GKN Automotive plant in Birmingham’ has been scheduled for Wednesday 28 April 2021 from 9.25 am. The debate has been initiated by Jack Dromey MP.
GKN Automotive is a global engineering company procucing specialist car parts. GKN was bought by investment firm Melrose Industries in March 2018. Background is covered in the Library breifing on Contested mergers and takeovers, section 3.2 (SN05374, 17 October 2018).
In January 2021 GKN annouced it intended to close its car parts factory in Erdington in Birmingham, potentially affecting 519 jobs with work being tranferred to elsewhere in Europe.
Jack Dromey MP for Birmingham Erdington constituency said the annoucement to close the Erdington plant was a "complete shock" to workers at the plant and went against promises made by Melrose Industries during the GKN takeover to make GKN a “British manufacturing powerhouse”. He has been campaining along with trade union Unite to find a solution to keep the plant open.
Simon Peckham, Chief Executive at Melrose PLC, told the Commons Business Energy and Industrial Strategy Committee in February 2021 that it was a "difficult decision" to close the plant in order to "make GKN a better business in the long run". He said that Melrose had "complied with the spirit and the word" of the undertakings given during the GKN takeover.
Business Secretary Nadhim Zahawi stated on 15 April 2021 that the Government had met with GKN Automotive management to explore options for securing a future for the site and safeguard jobs. He said the Government was "monitoring developments" and "stands ready to support those impacted back into work" in the event of the plant being closed.
Press articlesMP and union bid to rescue Spitfire factory and 519 jobs, Daily Mirror, 21 March 2021
Melrose slips deep into red but dividend green-lighted, Daily Telegraph, 5 March 2021
Melrose hopes to land large acquisition within a year; Industrials Sale process for $3.5bn US air-conditioning business kicks off again, Financial Times, 5 March 2021
Union says UK 'commits to further talks on GKN factory', Just Auto, 4 March 2021
Business Secretary Kwasi Kwarteng to hold meeting over Birmingham GKN plant, Business Live, 1 March 2021
Melrose under fire over plans to close GKN factory in Birmingham, The Guardian, 25 February 2021
Closing GKN plant 'difficult but necessary', says Melrose boss, Daily Telegraph, 23 February 2021
Union 'rescue plan' to save GKN Automotive and hundreds of jobs is revealed, Birmingham Live, 10 February 2021
Plans to close factory making parts for car companies, Shropshire Star, 28 January 2021
GKN factory in Birmingham set to close putting 500 jobs at risk, BBC News, 28 January 2021
Parliamentary Questions
PQ179090, GKN: Redundancy, answered on 15 April 2021
PQ179089, GKN: Closures, answered on 15 April 2021
Debate contributions
Budget Resolutions and Economic Situation, Vol 690, 9 March 2021
Jack Dromey [Erdington] Column 705
Graham Morris [Easington] Column 749
Business Energy and Industrial Strategy Committee
Formal meeting (oral evidence session): Businesses and Brexit preparedness, Business, Energy and Industrial Strategy Committee, Tuesday 23 February 2021, Oral evidence, Simon Peckham, Chief Executive at Melrose PLC
Press releases
Unite meets Kwarteng in save GKN plant talks, Unite Live, 4 March 2021
Melrose chief executive misled Parliament on GKN Birmingham site and must correct his evidence, Unite the Union, 23 February 2021
GKN workers warn West of England politicians of hostile takeover bid threat to jobs, Unite the Union, 2 February 2018
‘Bolt out of the blue’ as GKN close another Birmingham plant, Jack Dromey MP, letter to Secretary of State for Business Energy and Industrial Strategy, 8 February 2021.