The sale of Goodwin's military supply arm to American private equity firm Cerberus for £1.1 billion has ignited concerns over the increasing foreign ownership of Britain's defense industry. The Stoke-on-Trent based engineer, which produces parts for submarines and naval vessels, joins a list of companies vital to national security that have fallen into overseas hands in recent years.
Past acquisitions include flight refuelling innovators Cobham, Meggitt, Ultra Electronics, and the satellite company Inmarsat. Critics argue that private equity ownership can lead to companies being broken up, with headquarters and research and development functions diminished, potentially disrupting the defense supply chain.
While some argue that acquisitions by American buyers, as allies, pose little risk, recent global events have challenged this assumption. Former Tory defense secretary Michael Heseltine has pointed to the UK's National Security & Investment Act, which provides a mechanism for intervention, though it is rarely exercised. Only the largest British defense companies are typically protected by a golden share.
Goodwin, a family-controlled company since its founding in the 19th century, has seen its fortunes improve, with profits doubling last year due to defense orders. The £1 billion offer has been described as a 'no-brainer' to refuse, suggesting the company could be worth significantly more, especially given the private equity's aim for a quick return on investment.
Concerns have also been raised about the broader economic climate affecting Britain. Rising Brent crude prices, low fuel stocks, and volatile overseas supplies are contributing to inflation. Food prices are also surging, with a drought impacting grain harvests and leading to lower yields for fruits and vegetables. The Food and Drink Federation warns of significant price increases in the coming year.
In contrast to the defense sector concerns, the article notes a bright spot in British manufacturing: Formula One and automotive technology. Despite Formula One's franchise being owned by US media giant Liberty Media, UK workshops are integral to producing the technology powering the cars. The planned £450 million investment by McLaren into its Woking tech center, creating up to 1,000 jobs, is seen as encouraging amid challenges faced by other automotive firms. This investment, backed by Abu Dhabi ownership, suggests a positive future for McLaren's technological development.