As mass layoffs loom, GKN Aerospace battles with Boeing in court


An F-18 jet being built in St. Louis 

 (Dilip Vishwanat/The New York Times)

By James Drew – Reporter, St. Louis Business Journal
Aug 11, 2023

A United Kingdom-based investment firm and seven entities of GKN Aerospace have asked the Missouri Supreme Court to dismiss them from a lawsuit that The Boeing Co. (NYSE: BA) filed, arguing they are not subject to state law because they aren’t incorporated nor have their principal place of business in Missouri.

If the high court sides with them, it would leave only one defendant, GKN Aerospace St. Louis LLC, in the lawsuit pending in St. Louis County Circuit Court. Boeing has said GKN Aerospace St. Louis was rendered insolvent by its parent company, Melrose Industries PLC, the U.K.-based investment firm.

The lawsuit filed by Boeing in December 2022 resulted from GKN Aerospace St. Louis announcing that it would shut down its Hazelwood plant that makes aircraft parts for Boeing, saying the plant “consistently struggled for profitability in recent years.” Boeing is seeking unspecified damages from Melrose and the eight GKN entities.

The July 19 petition filed with the state Supreme Court by attorneys representing Melrose and seven of the GKN entities comes at a pivotal time in the dispute between Boeing and GKN. The eighth GKN entity, GKN Aerospace St. Louis, one of the St. Louis region's largest manufacturers, is not part of the petition because it owns and operates the Hazelwood plant.

In a notice filed with the state in June, GKN said it expected about 715 employees at the plant at 142 James S. McDonnell Blvd. will be affected by layoffs expected Aug. 25 and Oct. 6 this year, with final layoffs on Dec. 31, 2024. Under the federal Workers Adjustment and Retraining Notification Act, employers with 100 or more full-time employees are required to give at least 60 days advance notice in writing of a worksite closing affecting 50 or more employees.

A GKN spokesperson said in an email Friday afternoon: "The wind-down is proceeding as we set out in the WARN Act notice, with around 45 employees leaving in August and 35 in October."

Boeing said it has relied for more than two decades on GKN Aerospace St. Louis to supply “essential, complex parts” to make the F-15 and F/A-18 fighter jets used by the U.S. Air Force and Navy, and foreign allies.

The lawsuit accuses Melrose of failing to adequately capitalize GKN Aerospace St. Louis, rendering it insolvent. Headquartered in London, England, Melrose Industries is an investment company that buys and sells industrial and manufacturing businesses. Boeing also alleged that Melrose tried to use that insolvency in an attempt to escape liability for GKN Aerospace St. Louis breaching contracts to supply Boeing – and to try to force Boeing to acquire the company on “unfavorable terms.”

“Liability for these harms does not fall on GKN Aerospace St. Louis alone,” Boeing said in its lawsuit. “The decision to close GKN Aerospace St. Louis, forcing current and ongoing breaches of its contracts, was a top-down decision made by Melrose, a U.K. investment firm that acquired the GKN corporate family in 2018 through a hostile takeover.

“Melrose operates the aerospace companies in the GKN corporate family as a single entity called 'GKN Aerospace, with decisions being made by a limited number of individuals across all companies and without regard to corporate formalities or the legal separateness of what appear to be, on paper, distinct entities. Melrose dominates and controls GKN Aerospace and GKN Aerospace St. Louis within it,” the lawsuit stated.

In its petition to the state Supreme Court, attorneys representing Melrose and the seven GKN entities said Boeing wrongly asserted that eight of the nine defendants are covered by state law. The exception is GKN Aerospace St. Louis, attorneys wrote. The others are two U.K. entities, five Delaware companies and one California entity, they wrote.


“(Boeing) did not come forward with evidence to prove each Out-of-State Defendant’s minimum contacts with Missouri or otherwise their responsibility for the subsidiary’s decision to close the Hazelwood plant, out of which all of (Boeing’s) legal claims and alleged damages singularly arise,” the attorneys wrote.

In a July 10 opinion, the state Court of Appeals for the Eastern District upheld the decision by Judge Richard Stewart of St. Louis County Circuit Court that Melrose and the eight GKN entities are covered by Missouri law.

Matthew Diehr, an attorney with Husch Blackwell in Clayton representing Melrose and the GKN entities, and James Bennett of Dowd Bennett LLP in Clayton who represents Boeing, didn’t return messages seeking comment on Friday.