Melrose Industries eyes September production restart at Garden Grove

Melrose Industries PLC on Tuesday said it is targeting late September to resume full manufacturing operations at Garden Grove in California following an incident in May.

In response, shares in the Birmingham, England-based aerospace and defence company rose 8.7% to 502.00 pence each in London on Tuesday morning, the biggest riser on the FTSE 100 which was up 0.1%.

In May, Melrose reported an issue in a tank storing methyl methacrylate at Garden Grove which led to around 50,000 people being evacuated.

The site, operated by GKN Aerospace Transparency Systems, a Melrose subsidiary, designs and manufactures advanced military and commercial transparencies and provides aftermarket support services.

In July, the FTSE 100 listing said the incident reduced first-half revenue by £16 million and adjusted operating profit by £9 million.

At the time, Melrose paused its £175 million share buyback programme pending greater clarity on the financial impact, including regulatory and legal proceedings.

On Tuesday, Melrose said the Orange County District Attorney's Office has closed its criminal investigation and determined that it will not bring any criminal charges.

In addition, the firm said a claims programme will be launched to provide up to USD100 million for eligible residents and businesses seeking to resolve claims for damages.

The claims programme, which will remain open into 2027, will reimburse costs associated with the evacuation, including hotel stays, meals, transportation, loss of wages, and loss of use.

Claims by emergency services agencies for costs incurred in responding to the incident and potential civil enforcement penalties will be resolved separately and are not included in the claims programme announced Tuesday.

Melrose said its associated insurance position remains under review.

GKN is targeting September 28 to resume full manufacturing operations at the site, with a phased return to full capacity and customer deliveries during the fourth quarter.

The tank involved in the incident has been permanently decommissioned and Melrose said it has made substantial investments in safety enhancements at the facility.

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