Any GKN - More brit manufacturing sold - Orb>>.

www.theguardian.com/business/2025/jan/29/us-rival-...s

No talk yet of job cuts then

Any GKN - More brit manufacturing sold - John F

The question is, is American Axle and Manufacturing getting a bargain or a pup? Dowlais share price has virtually halved since Melrose spun it off less than 2yrs ago. Could it be yet another example of undervalued UK assets going for a song to savvy foreign buyers? Is it our own fault for not investing in business like the Americans do? In comparison, hardly any Brits save and invest in stuff that might create wealth; even our big pension funds seem to hold nothing but IOUs these days.

Edited by John F on 30/01/2025 at 12:42

Any GKN - More brit manufacturing sold - gordonbennet

One would expect GKN to be a large consumer of energy for manufacture, US commercial energy costs apparently around 1/3rd those in the UK currently and once the drilling crews get to full capacity following Trump's election are likely to be cheaper still.

Are they buying GKN to asset strip it with production moving to the USA (or Poland/Hungary who are close friends of Trumps US), never mind the land once cleared will provide many homes which is fine while house building is the economy..

Any GKN - More brit manufacturing sold - Terry W

Quite simply UK businesses are seriously undervalued compared to the US.

This is obvious from comparative price/earnings ratios - the US Dow average is 27.6, the UK FT is 17.0. The P/E ratio is a multiple - the years earnings divided into the share price.

For a US company to buy $1 additional earnings in the US it can pay up to $27.60 before diluting the interests of its existing shareholders. In the UK $27.60 will buy $1.62.

There may be commercial logic attached to marketing, design, R&D, economies of scale etc - but quite simply a US company can play corporate financial games by raising funds through equity in the US and buying earnings in sound UK companies.

Edited by Terry W on 30/01/2025 at 16:04

Any GKN - More brit manufacturing sold - misar
Any GKN - More brit manufacturing sold - Orb>>.

www.theguardian.com/business/2025/jan/29/us-rival-...s

No talk yet of job cuts then

Sadly you are living in the past. The Guardian today also had a commentary by Nils Prately.

Dowlais/GKN Automotive’s importance to the UK economy is not what it was, to put it mildly, which is why the deal caused no embarrassment to the chancellor on the day of her big growth speech. The UK operational base shrank with the rest of the automotive industry over the generations; the last UK plant, at Erdington in Birmingham, was closed on Melrose’s watch in 2021. Annual global revenue is £5bn, but this UK-headquartered company has just 37 UK-based staff.

Any GKN - More brit manufacturing sold - Engineer Andy
Any GKN - More brit manufacturing sold - Orb>>.

www.theguardian.com/business/2025/jan/29/us-rival-...s

No talk yet of job cuts then

Sadly you are living in the past. The Guardian today also had a commentary by Nils Prately.

Dowlais/GKN Automotive’s importance to the UK economy is not what it was, to put it mildly, which is why the deal caused no embarrassment to the chancellor on the day of her big growth speech. The UK operational base shrank with the rest of the automotive industry over the generations; the last UK plant, at Erdington in Birmingham, was closed on Melrose’s watch in 2021. Annual global revenue is £5bn, but this UK-headquartered company has just 37 UK-based staff.

Maybe bought for their client base. Sadly I saw that happen a LOT in my old industry of Building Services Engineering consultants, the big boys buying out well-established and highly regarded UK SMEs, who themselves sell-out (or rather their Directors do, in return for lots of ££££ to themselves) to big foreign (sole-less) conglomerates, both of whom gut the bought-out firm, to the detriment of staff, service quality and eventually reputation.

One firm in particular (I won't mention them by name) which was a leading industry name had a great reputation (and was always nicely profitable) that this happened to, with many long-established offices in the UK and (later) worldwide.

Now only one big office in London, name changed, poor reputation in comparison, drastically less staff and almost no staff perks to speak of. People used to stay there nearly all the career, it was so good. These days, you're doing very well if you reach 5 years. Most don't get anywhere near that.

Too many British firms have been run into the ground via bad (and selfish, greedy) management over the last century. Not long until (in every respect) we'll be a third-world nation. All those responsible will either be living it up abroad or long gone six feet under.

Any GKN - More brit manufacturing sold - John F

Quite simply UK businesses are seriously undervalued compared to the US.

This is obvious from comparative price/earnings ratios - the US Dow average is 27.6, the UK FT is 17.0. The P/E ratio is a multiple - the years earnings divided into the share price.

It could be argued that the US 'magnificent seven' are seriously overvalued. If they were stripped out of the calculation, the Dow p/e ratio would look very different. But it doesn't change the regrettable slide in total LSE stocks value, now little more than just one US tech co. (Nvidia, >$3 trillion)