GKN Bids for Filton and other Airbus Factories

Formal discussions have begun between GKN - the British engineering group - and Airbus, the European aircraft manufacturer, concerning future investment in Airbus' factory at Filton, Bristol, where composite wing parts are made and 6,500 people are employed. GKN is also showing interest in a brace of Airbus factories in France.

GKN is a key player in the investment stakes at Filton. However, the UK company, while claiming to be the leading global supplier of aerostructures made from composite material, is not the only contender for the Filton investment bid. The Kansas-based company, Spirit, which already owns manufacturing bases at Prestwick in Ayrshire and Samlesbury in Lancashire, could possibly be in the running for Filton, as could Sweden's Saab and Stork, a Dutch company, both of whom have also expressed interest.

Airbus initiated the proceedings over a week ago by seeking advice from Merrill Lynch, the investment bank. Airbus would strive to generate a substantial sum, possibly in the order of several hundreds of millions of pounds from such an investment deal. If this happens, it will most certainly consolidate Filton's and, indeed, the United Kingdom's position as a leader in composite technology. At this point GKN has refused to comment.

Over and above the Filton bid, GKN is putting its hand up for Airbus' Meaulte site in France as well as purchasing another facility at St Nazaire, also in France.

GKN is one of 11 hopefuls seeking to negotiate on 6 of Airbus' 17 European factories currently up for auction.

Airbus is selling these facilities under a plan to cut costs by £1.4 billion and regain profitability after plummeting into loss following production delays on the massive 555-seat A380 airliner. It hopes to achieve this target by 2010 and as many as 10,000 jobs will be lost under this scheme. Unions are robustly opposing this move.

Airport International's European Correspondent.