Alex Brummer: Private equity firm is selling off disparate Cobham parts at a rapid pace – the government must act
At a moment of geopolitical conflict, Britain’s defense capabilities are more important than ever.
The United Kingdom plays a crucial role in Ukraine, providing training and weapons to the country’s army, as it seeks to repel the Russian attack.
In the Middle East, RAF Typhoon aircraft, operating out of Cyprus, made an arduous 3,000-mile journey to Yemen to attack Houthi rebels threatening freedom of passage across the Red Sea.
In Focus: Alex Broomer says Britain’s defense capabilities have never been more important
It is a flight that was only possible thanks to in-flight refueling technology developed by aviation innovator Sir Alan Cobham.
How extraordinary that at a time when command and control of Britain’s defenses is so vital to our national security, that vital technologies, developed at Wimborne-based Cobham plc, have been allowed to fall into the hands of private investment firm Advent.
It is a group dedicated to generating quick profits for investors and attractive tax returns for partners.
Advent International managing partner Shonnel Malani is unapologetic about the rapid manner in which the British aviation champion, which was bought for £4bn in 2019, has been dismantled, “much to the delight of our investors”.
He claims to have fundamentally improved Britain’s defense supply chain. The sale of the Cobham air refueling system to Irish-American rival Eaton for £2 billion may seem to pose no threat to the UK: after all, the Americans are our allies in protecting shipping in the Red Sea.
The reality is that Britain has handed over its proprietary technology, vital R&D, and patents to an Irish-American giant, creating a hole in the nation’s sovereignty and capabilities.
Conflict: RAF Typhoons make arduous 3,000-mile journey to Yemen to attack Houthi rebels
For now, jobs in Dorset may be protected, but from now on decisions on workforce, R&D and investment will be made in the Eaton duplexes in Dublin and Ohio.
Furthermore, Ireland’s foreign policy and views on the Middle East differ significantly from that of the United Kingdom, which could harm freedom of action in the United Kingdom.
It would be easy for Advent to claim that they did Cobham a huge favor by selling out their disparate parts so quickly.
The truth is that Advent and other private equity firms are rarely business builders.
The goal is to buy undervalued assets, deprive existing shareholders of the upside to which they are entitled, and get rid of them as quickly as possible, often making wealthy investors richer than ever before.
The pattern of aggressive cost cutting, especially in technology-based organizations, is rarely positive.
Advent, having spun off Cobham, has also been allowed by UK public investors, the board and the government to gobble up another defense gem, Ultra Electronics.
Its advanced sonar technology is capable of detecting what leads to the capture and destruction of enemy submarines. With every control over the aviation and electronics sector, the British armed forces are being undermined.
At this time of extreme international risk, current and future governments must turn to national investment and securities law to protect what remains of our dwindling defensive players.
Cash and greed in private equity and outside ownership must no longer be allowed to work against the public interest.
(tags for translation) Daily Mail