USTR to scan £60 million UK govt. loan to GKN for purchase of Airbus plant

London/Paris: The United States said Monday it would scrutinise the sanction of a British government loan intended to help launch a new aerospace venture that will be taken out of UK Airbus and sold to engineering firm GKN. The £60 million reimbursable loan was announced on Monday by the UK government alongside a deal through which GKN will buy part of the historic Airbus plant at Filton in England for £136 million.

In Washington, the US Trade Representative's office said it would analyse the funding of the deal between Airbus and GKN.

Under terms of the agreement, GKN has also agreed to invest another £125 million pounds in the plant over five years. This investment will help pay for lightweight materials needed for the A350XWB, Airbus's futuristic model that competes with Boeing's 787 Dreamliner.

The Filton sale is part of a broader Airbus plan which aimed to sell up to seven European manufacturing plants in order to raise investments which would be deployed to make the A350XWB a lighter and more fuel-efficient aircraft, matching Boeing's hot-selling 787 Dreamliner.

For the UK, this is an important deal as the Filton plant employs 1,500 workers. This is critical as warnings have already been sounded that the UK economy may be close to slipping into a recession by the end of the  year.

The historic Filton site, located near Bristol, partly developed and produced the Anglo-French supersonic passenger jetliner Concorde in the 1960s. It will continue to design wings for EADS unit Airbus.