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Melrose Industries says GM strike hurt automotive, powder metallurgy units

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By Reuters

(Reuters) – Turnaround specialist Melrose Industries Plc <MRON.L> said on Tuesday that a strike at U.S. automaker General Motors <GM.N> dented sales at its automotive and powder metallurgy units for four months.

The car parts division of the GKN business that Melrose bought last year counts Volkswagen, GM and Ford among its customers. It also said initial steps to reduce working capital in GKN were being implemented.

The UK-based company, which also makes components for Boeing, Rolls-Royce, among others, said sales in powder metallurgy and automotive fell 13% and 5% respectively for the four months ended Oct. 31, while aerospace grew 5%.

Melrose said it was trading in line with the board’s view for the year.

Several auto parts makers have been impacted by the 40-day strike at GM, which began on Sept. 16 over higher pay, greater job security, a bigger share of profit and protection of healthcare benefits.

Analysts at Investec assume the strike has reduced Melrose’s revenue by about 50 million pounds ($64.80 million)and profit between 10 million and 15 million pounds.

In 2018, Melrose reported revenue of 12.25 billion pounds, including GKN’s results, and pre-tax profit of 886 million pounds.

(Reporting by Yadarisa Shabong in Bengaluru; Editing by Shailesh Kuber and Shounak Dasgupta)