Andy Burnham has been urged to block British manufacturer Goodwin from selling a key supplier to the Royal Navy nuclear submarine programme to US firm Cerberus.
The 143-year-old engineering company, based in Stoke-on-Trent, has agreed to sell parts of its mechanical engineering division to American private equity group Cerberus Capital in a deal valued at £1.1bn.
The division involved manufactures specialized components for the Royal Navy's new Dreadnought class nuclear submarines, sparking widespread national security concerns over foreign control of Britain's military supply chain.
The Dreadnought programme represents the next generation of the UK nuclear deterrent, designed to replace the aging Vanguard fleet of ballistic missile submarines. Based in Staffordshire in the West Midlands, Goodwin has operated as a major UK engineering manufacturer since 1883.
The proposed transaction follows a series of high-profile acquisitions of British defence contractors by foreign buyers in recent years, including GKN, Cobham, and Ultra Electronics.
Lord West, a retired Royal Navy Admiral and former First Sea Lord, expressed growing concern over the ongoing sale of domestic defence firms to overseas investors.
"I have a nervousness and it’s been growing for some time about the number of UK firms being taken over by foreign firms, particularly in the defence field," Lord West said. "There’s a need for sovereign control in these areas and you have to be very careful it is not being lost."
Critics have called on leaders including Andy Burnham, the Mayor of Greater Manchester and former Labour Cabinet minister, to lobby central government against allowing vital naval engineering capacity to fall into foreign hands.
Geopolitical tensions and ownership concerns
The proposed transaction for the Stoke-on-Trent engineering business comes during a period of heightened diplomatic tensions between London and Washington over differing approaches to Israeli settlements.
Strains in transatlantic relations have also surfaced across broader security issues. US President Donald Trump recently hinted that he would not support the UK regarding the Falkland Islands due to London's failure to back military attacks on Iran.
Security analysts and political figures noted that national security fears have been heightened by the corporate leadership structure at Cerberus Capital. The US private equity firm, headquartered in New York, was co-founded by Steve Feinberg, who currently serves as the US deputy defence secretary.
Former defence secretary Lord Heseltine called on UK government ministers to intervene and examine the proposed takeover under statutory national security powers.
"I would be a sceptic of allowing a British company in the defence industry to be moved out of European control," Lord Heseltine said. "We have an Act and it’s up to ministers to make it work."
Legislative powers and government scrutiny
Lord Heseltine referred to the National Security and Investment Act (NSI), which came into force in January 2022. The legislation gives UK government ministers mandatory powers to screen, restrict, or block foreign takeovers of companies in 17 critical sectors, including defence and military equipment, regardless of deal size.
Because of the sensitive nature of military assets, the deal for Goodwin's mechanical engineering unit is expected to undergo scrutiny by both British and US regulatory authorities. However, similar defence acquisitions have previously been cleared by UK government regulators.
Earlier this year, former business secretary Peter Kyle told the Mail that the government would not "take a back seat" when assessing overseas buyers seeking to acquire strategic British companies.
Despite those assurances, defence supplier Senior agreed just weeks later to a £1.4bn takeover by a consortium including private equity firms Blackstone and Tinicum. Senior supplies engineering components across the defence, aerospace, and energy sectors.
Financial results and corporate operations
Goodwin, listed on the London Stock Exchange as part of the FTSE 250 index, remains heavily dependent on both domestic and American markets. The United Kingdom remains Goodwin's largest market by revenue, generating 29 percent of total sales, while the US market has expanded its share to approximately 24 percent, according to the company's latest annual report.
The Stoke-on-Trent company recorded strong financial performance, generating annual profits of £77.5m in the year to April, representing a 118 percent increase year-on-year.
Timothy Goodwin, chairman of the company and member of the founding Goodwin family that remains majority shareholders, said the strategic value of the business had risen significantly. He noted that the "significant improvement" in the mechanical engineering segment had "substantially enhanced its strategic value and generated considerable external interest."
In response to national security concerns, Cerberus stated that Goodwin's operations and manufacturing facilities would remain headquartered in Stoke-on-Trent under the deal. The firm added that it intends on "building on the existing partnership with the Ministry of Defence to significantly enhance production capacity in the UK."
Following news of the transaction, shares in Goodwin fell by 3.7 percent, bringing the stock's losses for the year to 30.8 percent.
