Category Archives: Business

Business, Government, Politics, Scotland, Society

Digital Economy: Many small firms not able to cope with cyber attack

SCOTLAND

ONE in five businesses in Scotland is unprepared for dealing with a cyber-attack, raising fears that the economy is at risk unless action is taken.

A Scottish Government survey of more than 3,000 firms has revealed 19 per cent of them are “not equipped” or “poorly equipped” for dealing with an attack.

The research indicates that the private sector is at risk if hackers deploy viruses to disrupt the Scottish economy, which could also threaten the personal information of firms’ customers.

. See also Digital interfacing must be embraced by public sector

The survey comes just months after a malware attack wreaked havoc on NHS Scotland as hackers deployed a virus that sealed off vitally important files and demanded payment to unlock them.

The findings have sparked calls for more help from the Scottish Government to ensure firms are better prepared to deal with such incidents.

In 2015, the Scottish Government set a target for Scotland to become “a world leading nation in cyber resilience” by 2020. The UK Government has previously blamed Russia for major cyber attacks and the growing tensions between the two countries have increased fears of another major strike.

Separate research found a quarter of firms are struggling to grow because of the threat of a cyber-attack.

A spokesperson for the Federation of Small Business in Scotland, said: “We know there is a growing digital threat out there for Scottish firms and that is why the FSB offers services to members on this and have made the case to government north and south of the Border for extra help for small businesses.

“Like traditional crime, firms need to keep themselves safe and take sensible precautions. There have been high-profile cases where crooks have got the better of businesses and firms large and small need to protect against that threat.”

The Scottish Government surveyed 3,258 firms as part of a Digital Economy report. It asked them to what extent they felt equipped to protect against and deal with cyber-security threats.

Nine per cent said they were “not equipped at all” to deal with a cyber-attack and 10 per cent were “poorly equipped”. A further 47 per cent described themselves as “somewhat equipped”, while only 30 per cent rated themselves as “fully equipped”.

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Britain, Business, Defence, Government, National Security

The GKN bid and threat to national security?

MELROSE

THE hostile takeover of the defence giant GKN is to be investigated by MPs amid concern that it could harm national security.

In a rare intervention in a corporate takeover, senior executives from GKN and the predatory bidder Melrose are being called before the business committee.

MPs want answers about the risk to jobs, pensions and the manufacture of key military components if the £7.4billion deal goes ahead.

It came as Defence Secretary Gavin Williamson expressed “serious concerns” about the proposed takeover.

Giving evidence to the defence select committee, Mr Williamson said he had written to Business Secretary Greg Clark about the deal, adding: “There is no clarity as to what the true approach is going to be in terms of the GKN military side of the business.

“We sometimes have to ask tough questions as to whether we should raise concerns about the break-up of large successful important businesses that have a real impact upon our national security. It would have been remiss if I didn’t do that on this occasion.”

Turnaround specialist Melrose’s bid for GKN, which employs 6,000 people in the UK and 58,000 worldwide, is facing close-scrutiny amid concerns over its potential impact.

Redditch-based GKN, which is nearly 260 years old, makes parts for fighter jets including the US-UK F-35, the Eurofighter Typhoon, and the US B-21 stealth bomber. It also produces components for aircraft and car firms including Airbus, Mercedes and Toyota.

The Government is investigating whether it could intervene on national security grounds. The business committee is to hold a hearing into the takeover on March 6.

Committee chairman Rachel Reeves said: “GKN is an important company for the UK and globally. This session will be an opportunity to hear from Unite [the union] and for GKN and Melrose to set out their case for the future of the business.”

GKN’s fate was thrown into doubt last month when Melrose tabled its offer to buy the firm, which was rejected by board members as cheap and opportunistic.

Melrose’s strategy is to sell firms on it has acquired at a profit within three to five years, raising fears that GKN will be broken up piecemeal and sold off around the world.

Melrose suffered a £28million loss last year and has presided over factory closures and hundreds of job cuts.

The firm has said it welcomes the opportunity to appear before the select committee. It also said that while it believes there are no competition or national security issues, it asserts that it will be in the national interest for Melrose to be the guardian of GKN businesses. As a British public company, it says it is fully aware of its ownership responsibilities.

GKN said it was happy to give evidence to the committee.

 

AS MPs launch an inquiry into the hostile bid for Britain’s oldest engineering company, it is a relief that Westminster has at last woken up to this grave threat to our national interest.

Anyone who believes the get-rich-quick asset strippers at Melrose are fit to take over GKN should look closely what happened to FKI, another company that fell into their clutches ten years ago.

After selling off most of the firm’s assets for a huge profit, Melrose kept control of gas turbine manufacturer Brush – which has performed weakly ever since, with the threat of job losses now hanging over it.

Earlier this week, Melrose reported a loss of £28million after writing-off £145million from Brush’s value. Can such City takeover firms, relying on loans for their acquisitions, really be trusted to takeover GKN?

For 260 years, this flagship engineering firm has been vital to our defence, making cannonballs for Waterloo and Spitfires for the Battle of Britain. To this day, it remains a world-beater in the sort of technologies we will need after Brexit, whether building parts for stealth aircraft or driveshafts for new electric cars.

True, GKN needs to improve its efficiency. But it would be madness to let it be broken up and sold to the highest bidders at home and abroad.

As leading industrialist and Government adviser Sir Richard Lapthorne puts it: “The hollowing out of Britain’s industrial base has gone too far. The Germans and French would not even dream of allowing this.”

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Britain, Business, Defence, Government

Acquisition firm seeking to takeover GKN made £28m loss in 2017

MELROSE

THE PREDATORY firm plotting to snap up British defence giant GKN suffered a £28million loss last year.

Financial results for turnaround company Melrose also showed it has presided over factory closures and hundreds of job cuts.

Its annual loss for 2017 was fuelled by problems with power generation firm Brush, which it took over and acquired a decade earlier.

The loss-making figures will add to questions about Melrose’s suitability to own GKN, a key supplier to defence and aerospace industries with more than £9billion in sales.

Melrose has made a £7.4billion offer for GKN, which has some 58,000 employees worldwide including 6,000 in the UK, and makes key parts for fighter jets, airplanes and motor vehicles.

But the bid has been rejected by the board of GKN as being “cheap and opportunistic”, triggering the biggest hostile takeover battle in a decade and calls for the UK Government to intervene.

Alex Chisholm, permanent secretary for the business department, has been quizzed about the bid by the Commons business committee.

Defence Secretary Gavin Williamson is also under pressure in answering questions from the defence committee. GKN has significant stakes in military projects and supply chains.

Melrose insists it remains well-placed to push ahead with its offer. Chairman Christopher Miller said: “Substantial long-term value is being created with significant investment in new technology, new products and operations.” The financial woes at Melrose stem from a takeover of engineering group FKI in 2008, which included buying Brush.

Melrose has also disclosed that it was writing-off £144.7million in value from this division, including £31.1million on the closure of its factory in Changshu, China. Melrose said Brush’s generator sales fell 43 per cent last year.

The results revealed that up to 270 jobs are at risk at Brush’s production factory in Loughborough. It is also closing its facility in Ridderderk, Netherlands, and shifting work to the Czech Republic.

Elsewhere, Melrose closed loss-making operations in the heating and ventilation division of Nortek, the US manufacturer it bought in 2016.

A spokesperson for Melrose said: “Brush remains a fine business which we are happy to support … The real number investors will focus on is the dramatic increase in underlying profits and the near doubling of the dividend, which reflects our confidence in the progress being made at Nortek.”

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