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Turns out you don’t need a tough activist reputation to spur change at companies anymore

An era of big-name activists with fiery personalities waging noisy proxy battles and wielding brash tactics to win board seats is over.

Carl Icahn, facing attacks on how he manages his own publicly traded firm, has slowed his fire. Nelson Peltz, fresh off losing a battle with Disney, is planning to hand his firm to his less pugnacious son and others. Bill Ackman and Jeff Ubben have walked away from fights. Dan Loeb hasn’t had a big proxy war in years.

In their stead is a newer crop of activists who are smaller in size, less well known and often less eager to brawl.

The activist shift is coupled with changes on the corporate side. After years of activists hammering the same points over and over, many boards are more alert. They are moving faster in cases of underperformance, firing CEOs, striking deals and more willing to embrace activists who do come along.

The results: The number of proxy fights that go all the way to a vote is down. Settlements with companies are up, and coming faster than ever. And the returns of the activist funds are generally underperforming.

With the proverbial low-hanging fruit picked, and fundraising difficult, it is unlikely a new activist giant will emerge to strike fear each time it appears in a shareholder roster.

“The industry in most cases is becoming much more institutionalized,” said Charlie Penner, a longtime activist investor who launched a new firm with a name purposefully meant to sound anonymous: Ananym. “It’s not as personality-driven anymore.”

For the past two years, nearly two-thirds of agreements between companies and activists have been struck privately, according to an analysis by FTI Consulting. Even when things get heated, they are cooling quickly. It took only an average 34 days for an investor to get a settlement after publicly demanding board seats in 2024, down from 68 days in 2023, FTI found.

Take some of the settlements that happened in recent months with investors: CVS Health quickly settled with Glenview Capital Management, which isn’t typically an activist.

Ancora Holdings took on Norfolk Southern in a proxy fight earlier this year—winning three board seats—and later struck a settlement deal to expand the board and avert a second proxy battle at the railroad operator. Engaged Capital struck an agreement last year with burger chain Shake Shack. Sachem Head Capital Management landed a spot on communication-technology firm Twilio’s board in April. Anson Funds recently snagged a seat on the board of cloud-software provider Five9.

Penner was at Engine No. 1 when that little-known firm successfully challenged the board of Exxon Mobil and he previously worked at Jana Partners. He launched Ananym Capital Management this year with Alex Silver, formerly of another firm, P2.

An “ananym” is a pseudonym made by spelling one’s name in reverse. Penner said they chose it in part to underscore today’s dynamics. They recently found a first target: pushing Henry Schein, a healthcare products distributor, to change its board.

“It shouldn’t be about ego or whatever,” Penner said. “It should be about having good ideas and a good process.”

From ‘corporate raiders’ to ‘constructivists’

Shareholder activism traces its roots back to the 1980s, when investors started to buy up stakes in companies and agitate for changes ranging from management shake-ups to strategic breakups. Into the 1990s, the investors were commonly referred to as “corporate raiders.”

In the last few decades, they have worked to shed their negative stigma. Nelson Peltz, founding partner of Trian Fund Management, has waged some of the biggest proxy fights ever, including at Procter & Gamble in 2017 and Disney in 2023. He is also among those labeling themselves as “constructivists,” for being helpful rather than antagonistic.

They pitch complex plans for turnarounds and corporate shifts, not only financial moves aimed to juice the stock immediately. By proving they do their homework, firms like Elliott Investment Management, Starboard Value and Jana have won more allies.

But companies and their defenders still scoff at the constructivist idea and believe activists themselves can be disruptive.

That is one reason activists propose allies for boards. Fifteen or 20 years ago, the big-name fund managers would mostly nominate themselves for board seats, said Amy Lissauer, global head of activism- and raid-defense at Bank of America.

“Activists now are identifying great independent candidates…the highest quality I have seen,” Lissauer said.

Companies play defense first

Company attitudes have also helped reduce big activist brawls.

Management teams are now more cognizant about the possible threat and are working to stay ahead of it by swapping directors and executives and pursuing deals.

In 2024, a number of companies including Boeing, Under Armour and Intel have ousted their CEOs without the known presence of an activist.

“There were many sleepy C-suites and passive boardrooms, and it took an activist waging a public campaign to shift the mindset,” in years past, said Mary Ann Deignan, head of Capital Markets Advisory at Lazard, where she helps defend companies against activist attacks.

CVS this fall ousted its CEO and concluded a strategic review, then struck a deal to add Glenview founder Larry Robbins to its board of directors. Robbins had only twice in 24 prior years used an activist playbook.

It is also true that many companies have grown more fearful of losing because of a recent change in the proxy voting procedures, leading them to accept the activists quickly.

The pressure for returns

Many of the new-age activists worked for the first generation. Now they need to raise money on their own reputations, which has proven difficult.

Activist hedge funds as a group saw net outflows in four out of the last six years, though are seeing a slight bump in 2024, according to HFR, a hedge-fund data tracker.

Activist-focused hedge funds also generally tend to underperform the broader market. Through early December of this year, activists were up 6.4% versus the S&P 500’s rise of over 30%, according to HFR.

“It’s becoming increasingly harder for activists to raise money,” said Michael Levin, founder of consulting firm The Activist Investor. As a result, some firms realize “it doesn’t pay to be quite as distinctive or outspoken.”

There remain exceptions and big fighters, including Elliott and Icahn.

But Icahn had his own Icahn Enterprises hit by short-seller accusations that he was overvaluing some positions. Icahn has denied the claims, but has dialed back his activity.

Peltz has seen his firm’s assets under management shrink and is preparing to step back himself, handing over more responsibility to a younger generation of leaders, including his son, Matt Peltz, as well as Josh Frank and Brian Baldwin. Some wonder whether Trian will continue launching high-profile activism campaigns when the elder Peltz is no longer at the helm.

(Baldwin landed a seat on U.K.-based Rentokil Initial’s board in October, shortly after Trian disclosed a position in the pest-control maker.)

More may go the way of Ackman, once one of the biggest activist managers. After a series of losses, he decided to be less vocal and more friendly about investments.

“It makes our job easier and more fun, and our quality of life better,” Ackman penned in his annual letter to Pershing Square investors in 2021. “So, if it is helpful to call this quieter approach Pershing Square 3.0, let it hereby be so anointed.”

Even before Christmas market attack, nation was straining under influx; economy needs new workers

SUHL, Germany—Ten years ago, this town in central Germany was aging, rapidly depopulating and almost universally white. Today, its population has stabilized, is younger and includes people from 92 countries.

Some longtime residents have welcomed the change, but for many others, it’s happening too fast. In May, conservative Mayor André Knapp was re-elected with more than 82% of the votes after a campaign critical of immigration, which he blamed for a rise in local crime. In September, the Alternative for Germany, or AfD, a far-right party that advocates mass deportations, won its first state election in Thuringia, where Suhl is located.

“Of course we need immigration, we need foreign workers, but we can’t have a situation where our town is getting completely overwhelmed,” said Knapp.

Many Western countries are rethinking their immigration policies and how open they want to be, even as they grapple with the effects of low birthrates and aging populations. U.S. President-elect Donald Trump made restricting immigration, including mass deportations, a central pitch in his campaign. Countries including Canada, Sweden, Denmark and the Netherlands have tightened controls, citing costs, popular pressure and security. In Austria, the anti-immigration Freedom Party won a general election in October. That same month, Poland said it would bar entry to asylum seekers and tighten visa policy. Earlier this month, Elon Musk weighed in on the issue, posting on X: “Only the AfD can save Germany.”

Germany has long been one of the world’s most welcoming nations to migrants. Between 2013 and 2023, 6.43 million more people settled in Germany than left, according to Germany’s Federal Statistics Office—the biggest inflow of any country outside the U.S., according to the United Nations.

Polls show immigration is a top issue for voters ahead of a general election in February. The concern is likely to gain urgency after a 50-year old Saudi refugee was detained on suspicion of ramming a car into a Christmas market in Eastern Germany on Dec. 20, killing five and leaving more than 200 wounded.

Some of Germany’s new arrivals are workers from other countries arriving to fill specific jobs, or students coming to study. Germany also is the most popular destination in the EU for refugees, accounting for a third of asylum applications in the bloc. Since the 2015 refugee crisis, when hundreds of thousands streamed into Europe, Germany has received 2.4 million asylum seekers, twice the population of Munich.

Migrants, defined as people living for more than 12 months outside their country of birth, made up 18.8% of the population in Germany in 2021, compared with 15.3% in the U.S. in that year, according to the United Nations.

In Germany, 42% of people under age 15 were either foreign-born or had at least one foreign-born parent—Germany’s definition of a statistical category it calls “people with a migration background”—as were 37% of people ages 15 to 24, according to government data for 2022.

Germany, which has no history of mass immigration and limited experience integrating people from other cultures, is now becoming a case study of the challenges that can emerge when migration outpaces a society’s capacity to adjust.

Most economists agree that the German economy, which has stagnated since 2019, badly needs immigrants. Germany was among the first countries in Europe to see fertility rates collapse in the 1970s. Now, as baby boomers retire, the financial burden of their mounting pension and health insurance costs will be borne by fewer workers.

Although unemployment in Germany has been edging up after two years of recession, many sectors, from engineering to health to hospitality, still complain about a crippling labor shortage. A study this year by the Bertelsmann Foundation, a nonpartisan research organization, found that Germany would need net immigration of between 288,000 and 368,000 every year between now and 2040 just to maintain the size of its workforce.

“Germany as a whole, and eastern Germany in particular, are in a demographic crisis,” said Niklas Wassmann, a center-right member of the parliament in the state of Thuringia. “For every two residents of Thuringia who retire today, only one enters the labor market. We can’t rely on technological innovation alone to maintain our growth. We need to bring people in from outside.”

Yet Germany hasn’t had much success integrating newcomers into its labor market. The unemployment rate for noncitizens last year was 14.7%, compared with 5% for citizens.

In the U.S., migrants seeking asylum typically receive no federal aid, but they are permitted to work once they submit their applications. In Germany, they aren’t generally allowed to work until they are officially deemed refugees, which can take months or even years. But they are entitled to benefits worth as much as hundreds or thousands of euros a month—which cost the federal government €29.7 billion in 2023, according to research company Statista. State governments bear additional costs.

More than 60% of the people in Germany who depend on government benefits for income are foreign-born or are second-generation migrants. Noncitizens, who make up 15% of the population, perpetrated 41% of all crimes in 2023, up from 28.7% in 2014, according to police statistics.

In a September poll conducted by Infratest dimap for public-sector broadcaster ARD, 77% of respondents said Germany needed to change its immigration policy. In a separate survey by insurer R+V, 56% said they feared the government was being overwhelmed by immigration, and 51% said they were concerned about political tensions related to the issue.

Immigration was one of the issues that divided the fractious ruling coalition in Berlin that collapsed in November. Polls show the center-right CDU is the heavy favorite to win the February election, with the AfD in second place.

“Immigration is having an impact in all aspects of life,” said Thorsten Frei, a senior CDU lawmaker and one of the architects of the party’s immigration platform, which calls for turning back asylum seekers who traveled through other safe countries on their way to Germany. “We have to recognize that we are being overstrained,” he said. “We’re not keeping up.”

Like most towns in Germany’s formerly communist east, Suhl was largely homogenous when the Berlin Wall fell. By 2013, it had fewer than 1,000 foreign-born residents. By year-end 2023, that figure had grown fivefold. Poles, Romanians, Syrians, Afghans, Ukrainians and other foreign nationals now account for more than 13% of Suhl’s 35,000 residents.

When asylum seekers arrive in Thuringia, most are sent first to live at the state’s Initial Reception Facility on the outskirts of Suhl, a hilltop complex of five-story buildings. It is meant for 800 but has routinely housed twice as many.

The facility, known by its German abbreviation EAE, is surrounded by fencing, and both occupants and employees must swipe an ID to get in. It is cramped, unhygienic and dangerous, according to local officials and current and former residents.

The asylum seekers are mostly from the Middle East, Afghanistan and Africa, with others from Russia, Iran and Turkey. Residents are housed in two buildings—one for men and another for families, pregnant women and LGBTQ people.

Security challenge

When the refugees first began arriving in 2015, “there was a lot of compassion” in town, said Karin Hornschuh, an 82-year-old who leads volunteers who organize sports activities and games for the center’s children. These days, she said, support for her efforts has all but disappeared. “Some people say they are being invaded,” she said.

Reinhard Hotop, a member of a church organization that provides asylum counseling in the camp, said sentiment began shifting in 2015 after the police stormed the facility to prevent what authorities called an attempt to lynch an Afghan man who had torn up a Quran. Over a dozen residents, police and guards were wounded. Five asylum seekers were convicted of inciting a mob.

During the pandemic, break-ins in a nearby neighborhood were traced back to the camp. Last year, the fire department was dispatched to the camp 299 times for emergencies, including two alleged arson attacks by residents.

Police figures show noncitizens are responsible for one-third of crimes in Suhl, two-thirds of shoplifting incidents and more than half of aggravated assaults.

“Just this week, I caught three guys…trying to steal €400 worth of perfume,” said Thomas Wolf, manager of the Müller drugstore. who said he was attacked twice last year by foreign shoplifters. “Last time, it left me with a torn shirt and pants and a visit to the doctor,” he said.

National crime statistics indicate that noncitizens account for a disproportionate share of crime. Among the explanations offered by local police: poverty, joblessness and the young age of migrants. Local police said some migrants need money to repay smugglers or family members who funded their journey.

The influx of migrants has emerged as a big challenge for Germany’s schools.

“Our school has about 35% of non-native speakers,” said Alexander Dorst, director of the Otto Lilienthal Community School in Erfurt, Thuringia’s capital. Younger children who can’t speak German are easier to integrate than older ones, he said. “Politicians often say, ‘Sit them in there and it’ll be fine.’ It’s not…You can’t sit a kid who can’t speak next to one who can and hope he’ll somehow catch up. It’s hell for that kid.”

Students from more than 20 nations, including a large group of Arabic speakers and a sizable Ukrainian contingent, are now split into two groups. Those with poor German initially attend a “German as a second language” class in addition to classes that don’t require fluency, such as math and art.

While German-born children of migrants tend to fare well in school, the performance of those born outside Germany has worsened over time and is below that of foreign-born students in other rich countries, according to a 2024 report by the OECD.

Dorst said his school is trying to foster a sense of belonging, but that integration can work only if foreigners don’t reach a critical mass. With so many newer students, he said, many congregate along national lines, which occasionally leads to clustering in gangs and physical confrontations.

“We must be careful that these differences don’t turn into rifts,” he said.

Many families of newer arrivals have settled in low-rent parts of the city, including in a Communist-era housing project near the school called Rieth.

“Ten years ago, foreigners made up 9.5% of Rieth’s residents,” said Wassmann, the state lawmaker. “Today it’s 32%.” Erfurt is now one of the most segregated cities in Germany, he said.

Labor problem

The state of Thuringia expects to lose 40% of its workers to retirement in the next five years. If younger foreigners are to fund the pensions of future retirees, they will need to be working. That hasn’t been happening.

Germany’s income-support system entitles anyone unemployed for longer than a year—and any worker whose income is below a certain level—to a tax-free stipend. In addition, the state pays for rent, heating, medical bills, school supplies, daycare, even mortgage interest payments. A family with three children 14 and older can get €2,425 a month in cash payments alone.

All qualified refugees are eligible, although those awaiting an asylum ruling are entitled to less support. German authorities have said it can be easier for noncitizens to qualify than for citizens because the benefit is means-tested, and authorities often struggle to estimate assets abroad.

“The cushier the safety net, the more unattractive it becomes to take up work, especially here where we have a lot of jobs that pay the minimum wage,” said Steffi Ebert, head of a work placement agency in a rural district west of Suhl.

Germany sets high hurdles for those who want to work. Asylum seekers aren’t permitted to work for at least three months after arrival. Electricians and mechanics aren’t allowed to own their own business or hire employees until they complete a vocational course. Economists and politicians said Germany is slow in recognizing foreign qualifications for doctors and teachers.

Millions of migrants now depend on government support. In the rural district west of Suhl, 35% of the recipients of income support are noncitizens, compared with almost none a decade ago, Ebert said.

Nationwide, almost half of recipients are noncitizens. Only 18% of the more than one million Ukrainian refugees work and earn enough not to qualify for benefits, compared with 65% of them in the U.K. and 61% in Poland, according to government data compiled by Statista.

Economists agree that Germany’s growing migrant community could be a boon. Statistically, foreigners are more likely to own their own businesses. On Erfurt’s Johannesstrasse, boarded up stores have given way to a Syrian market, Arab barbershops and Asian grocers. Thuringia has become a logistics and transport hub that employs many migrant workers, many of them taking jobs that would otherwise go unfilled.

“The only reason Thuringia has stable employment is our success in bringing migrants into the labor market,” said Irena Michel, head of the state labor agency for central Thuringia.

For decades, Suhl was a left-wing stronghold. In 2018, it elected Knapp, a center-right politician, on a promise to fix immigration problems. In September, the nativist AfD party won the state election in Thuringia with more than 30% of the vote—its best ever showing there.

“When [former German Chancellor] Angela Merkel failed to close the borders after the migration crisis started, we warned about what would happen,” said Stefan Möller, the AfD’s No. 2 official in Thuringia. “And people now see that our warnings have come to pass.”

At the end of the summer, delegates from Germany’s federal government and mainstream opposition parties gathered at Chancellor Olaf Scholz’s office to discuss ways to curb the influx. The trigger was the arrest of a Syrian whose asylum request had been rejected and who was suspected of killing three people in an attack claimed by Islamic State.

Days later, Germany reintroduced border controls. Scholz, a center-left politician, has pledged to deport undocumented migrants “in a big way,” and recently reintroduced sanctions for welfare recipients who refuse to work.

Merz, the center-right CDU chairman who polls suggest could become Germany’s next chancellor after the February election, wants all asylum seekers who travel through another EU country on their way to Germany to be turned back.

Turkey cuts interest rates for first time in 22 months with jumbo reduction

Central bank slashes borrowing costs by 250bp as consumer demand slows

Turkey’s central bank lowered its main interest rate for the first time in almost two years, pointing to slower consumer demand and the currency’s strength for a larger-than-expected cut of 250 basis points.

Policymakers lowered the benchmark rate to 47.5 per cent from 50 per cent in the first reduction since February 2023, when President Recep Tayyip Erdoğan pushed for lower borrowing costs to spur economic growth during his re-election campaign. The cut was bigger than the median forecast of a reduction to 48.25 per cent, according to economists polled by Bloomberg.

Annual consumer price inflation dipped to 47 per cent in November, down from a peak of nearly 86 per cent in October 2022. The government’s decision earlier this week to raise the minimum wage by just 30 per cent next year might have also encouraged the central bank’s move to ease rates, analysts said.

The central bank said it saw signs of inflation slowing further in December, but noted it was not abandoning its tight monetary policy.

“The . . . stance will be maintained until a significant decline in the underlying trend of monthly inflation is observed”, it said on Thursday, adding rates will be determined on a meeting-by-meeting basis.

The central bank said on Wednesday it would meet eight times in 2025 to set rates, rather than the usual 12 meetings.

“The central bank signalled that they may choose to slow or pause in the forthcoming meetings,” said Hakan Kara, former chief economist at Turkey’s central bank, and noted that the minimum wage increase, far smaller than previous rises, provided “some leeway” for the reduction.

Erdoğan said in a post on X late on Tuesday that the minimum wage would be a net 22,104 lira ($627) a month, a move welcomed by investors as a sign of his commitment to slowing consumer demand and inflation. About a third of Turkish workers earn the minimum wage, and the annual change serves as a guide for other salary increases.

But labour groups blasted the new pay rate, with the head of Türk-İş, a union with 1.75mn members, calling it “unacceptable.”

Consumer prices rose 0.07 per cent for every percentage point increase in the Turkish minimum wage, the central bank calculated last year. Türk-İş has said clearing the hunger threshold for a family of four requires a monthly wage of 20,562 lira.

Erdoğan dramatically boosted salaries to win over voters ahead of elections in 2023 and 2024. But he has recently pivoted to more market-friendly policies to lure back foreign investors who were deterred by years of low interest rates when the country was experiencing severe bouts of inflation. Turkey began raising rates in June 2023.

The government must now meet its pledges to cut spending and boost tax revenue to bring down inflation, forecast by the central bank to reach 14 per cent at the end of next year, analysts said.

“The central bank is largely playing its part,” said Kara. “Achieving the desired inflation targets will only be possible with more fiscal and institutional adjustments.”

Trump’s crypto embrace overshadows new EU digital assets rules

US approach to digital currencies will draw business from Europe, industry executives say

Donald Trump’s embrace of cryptocurrencies risks undermining Europe’s incoming rules on digital assets as companies overlook the continent in favour of a friendlier US market, industry executives have warned.

Companies such as Binance, the world’s largest cryptocurrency exchange, have indicated they will look to refocus their attention on the US after Trump promised to make the country “the crypto capital of the planet”.

Top executives and analysts say a crypto-friendly White House will exert a strong pull that compares favourably to the European Union’s new landmark rules, which come into force from December 30.

The bloc’s rules, known as the Markets in Crypto-Assets Regulation (MiCA), will set guardrails for the public following the collapse of companies like exchange FTX and lenders including Genesis and Celsius. The standards have in the past been praised by the industry as a potential benchmark for global crypto asset regulation.

“In the previous US administration . . . MiCA certainly seemed like it was a good way of trying to think about the crypto industry without completely killing off innovation,” said Eswar Prasad, senior fellow at the Brookings Institution. 

But in the wake of Trump’s win, “we’re going to see a migration of crypto-related activities away from Europe in any form because things are going to be much easier in the US,” he added. “[MiCA] is going to be seen as very stringent.”

Trump’s victory has helped propel bitcoin to a record high of $108,000 this year, more than double its price a year ago. Retail and institutional investors have warmed to Trump’s pledge that he will end the US’s tough regulatory crackdown of recent years.

He has also nominated Paul Atkins, a crypto advocate, to head the Securities and Exchange Commission, and appointed David Sacks, a venture capitalist, to advise the president on crypto and AI policy. “We’re going to do something great with crypto,” he said last week.

The EU’s MiCA rules will regulate the issuance of crypto coins including stablecoins, as well as digital asset services like custody and trading by demanding that companies providing those services are authorised in the EU.

Yulia Makarova, special counsel at law firm Cooley, said complying with MiCA “increases the costs for start-up firms” in particular. “Ongoing compliance costs can be such that the business gets to the brink of viability,” she added, warning that crypto start-ups may choose to launch in the US rather than the EU.

Some companies, such as US cryptocurrency exchange Coinbase and Circle, operator of the stablecoin USDC, have secured their EU licences. However others, such as Tether, the world’s largest stablecoin, will not be compliant with the new rules and are being delisted by local regulated exchanges.

“The new administration might take a bit of shine and a bit of edge off MiCA,” said Denzel Walters, head of Luxembourg at market maker B2C2. “But I still think MiCA here presents a really great opportunity for the digital assets market,” he added.

Executives are betting that Trump, as well as a new cohort of pro-crypto politicians in Washington, will also make headway with new legislation for crypto assets, which will in turn pave the way for traditional financial institutions to plough money into crypto.

Already, crypto companies that dropped US services for fear of being hit by regulators, or were banned, are planning to return. “We are closer than ever to restoring US dollar services and our plan is to achieve this important milestone in early 2025,” said Norman Reed, interim chief executive of crypto exchange Binance US. “It is not a matter of if, but when,” he added.

Workers at BAE Systems’ Lancashire factory assembling the fighter jet are worried about their future

BAE Systems’ sprawling factory in Warton, Lancashire, has been assembling combat aircraft for more than a century, building everything from Tornado fighters and Hawk training jets to the Eurofighter Typhoon. 

But more than three decades since the launch of the Typhoon, work on the final assembly line is starting to dry up amid a slowdown in new export orders for the UK and as yet no new commitment from the Labour government. Warton is due to deliver the last of two jets to Qatar in the first half of next year under an export deal sealed six years ago and, with no new orders agreed for the UK, employees are anxious. 

There is a “massive worry about the near future”, said Steven McGuinness, a member of the Unite trade union executive council. 

The government’s recent decision to proceed with plans to build the next generation fighter aircraft together with Japan and Italy was welcome, he added, but workers were concerned about the outcome of the ongoing strategic defence review and the “lack of any definite export orders” for the UK.  

BAE Systems is one of the largest private sector employers in Lancashire, employing about 10,000 people across its Warton and nearby Samlesbury sites over a number of combat air programmes. About 6,000 work directly on the Typhoon programme.

Although the number of staff on the final assembly line is relatively small — typically about 50 — they help make Britain among the handful of countries capable of building advanced fighter jets. The UK needs their skills to fulfil its role in the Global Combat Air Programme (GCAP). 

BAE and Warton are “central to the North West’s economy and the UK’s defence industry”, said Andrew Snowden, Conservative MP for Fylde, adding that he had “repeatedly” raised concerns about the future of Typhoon production. 

“Most recently, I asked whether the RAF’s plans to order 24 Typhoon jets were included in the Budget, only to discover they are not,” he added.

Unlike the UK, all other partner nations in the Eurofighter Typhoon consortium — Germany, Italy and Spain — have committed to new orders. Germany said in June it would order additional jets, while Spain and Italy placed new orders this month, bolstering the aircraft’s order book over the next decade. The UK’s last order — for the third tranche of the Typhoon — was placed in 2009.

The Typhoon consortium involves BAE, Airbus and Leonardo, with each company building different parts for every aircraft. They also operate a final assembly line in each partner nation — when a partner nation orders jets, or leads on an export deal, it assembles the aircraft.

BAE builds all the front fuselages for the jet at its Samlesbury site. In the case of the recent German, Spanish and Italian orders, the fuselages will be sent to the continent for final assembly.

For export orders one company takes the prime contractor position depending on the nation’s political ties. The UK is the lead Eurofighter export nation for Qatar, Turkey and Saudi Arabia, with BAE taking the prime contractor role. 

There have been expectations of new orders from Qatar and Saudi Arabia for some time but none have yet been confirmed. Once the last two jets for Qatar are delivered next year, BAE is expected to keep some work going on the final assembly line with research and development for future projects. The company has, in the past, also redeployed workers across the wider Typhoon programme and other combat air projects.

BAE told the Financial Times that its Typhoon production line was “currently underpinned by the orders from Qatar, Germany and Spain, which ensure continuity of production of major units beyond the late 2020s”. The company, it added, takes its “responsibility to retain our high value skills and capabilities seriously”.

An added concern for workers, meanwhile, is that the government may decide to buy more advanced US F-35 aircraft to replace old Typhoons being taken out of service, amid suggestions the Royal Air Force is keen to secure more of the stealth jets.  

The UK is regarded as a “tier one” partner on the Lockheed Martin-led F-35 programme — about 15 per cent of the components are built in Britain, including the aft fuselage of every jet by BAE — but the company’s workers argue that national sovereignty is at stake. 

It was “important to ‘buy British’ so that people keep the muscle memory and the skills of how to do final assembly line work”, said McGuinness, adding that it was about preserving the UK’s “freedom of action”.

Buying F-35s “doesn’t work for UK plc”, said Rhys McCarthy, Unite national officer for aerospace. “Do we buy F-35s and ‘make America great again’ or do we buy Typhoons and support British industry,” he asks.

Francis Tusa, editor of the Defence Analysis newsletter, added: “I don’t think it’s better buying from the US any more. How do you keep capabilities and workforce and skills going until GCAP if there is no manufacturing.” 

The partners in the GCAP programme have promised to have an aircraft flying by 2035, with production expected to start towards the end of the decade.

Paul Livingston, chief executive of Lockheed Martin in the UK, said the group had been a “strategic partner” for Britain’s defence establishment for more than 80 years. 

He declined to comment on any talks with the government but stressed the F-35’s capabilities. The UK’s “ageing fourth-generation [fighter] fleet is nearing the end of its production life and can only be upgraded so far through expensive development programmes that introduce an element of risk”, he said. Meanwhile, the “fifth-generation F-35 can today undertake most of the required roles”.

The Ministry of Defence said the government’s new industrial strategy would help to make the defence sector an “engine for UK growth and will strengthen domestic supply chains”.

The government, it added, remained “committed to ensuring that [Typhoon] remains at the cutting-edge of the UK and Nato combat air power until its retirement” and it would continue to work with BAE to upgrade existing jets.