GKN in new war with rival Melrose on pension plans

A fresh war of words on pensions broke out on Tuesday between arch-rivals GKN and Melrose over who can best look after the company’s 32,000 pensioners.

GKN accused hostile bidder Melrose of making “misleading” comments about its pension plans, unveiled last week, whereas Melrose said the engineering company was “seeking to hide the true picture” with the proposals.

Both sides have made a string of pledges to fill a black hole in the GKN pension scheme, which has come to dominate political concerns over the £8.1 billion bid battle.

GKN has promised to wipe out a £675 million deficit and reduce liabilities from £3.3 billion to less than £2 billion by buying out pensioners with a lump sum payment and turning over some responsibility to US suitor Dana.

Melrose said such buyouts are “frowned upon” and the pension bill — equal to about eight times the company’s earnings — was “still far too high to be respectable”.