FOR many old hands in the City of London, the culture of Melrose, a buy-out firm, feels like a nostalgia trip back to the 1980s. The firm’s executives are known for extended lunches and rounds of golf, activities for which most bosses no longer have time. True to form, on January 17th Melrose launched a hostile takeover bid—the first for a FTSE 100 company in a decade—worth £7.4bn ($10.5bn) for GKN, a maker of car and plane parts. The bid casts doubt not only on the survival of GKN, Britain’s third-largest independent aerospace and defence firm, but on much of the rest of the industry, too.

Melrose is known for buying up struggling engineering firms, streamlining their operations and selling them on for profit a few years later. It wants to repeat this trick at GKN, which has been laid low by a series of problems. In October GKN warned that its profits would be £40m less than expected; the next month it revealed write-offs of up to £130m in its American division. Its board has rejected Melrose’s offer and set out plans to split its car- and plane-parts businesses to boost profits.

GKN’s investors may well accept a takeover. The firm’s shares have risen by a third since Melrose launched its bid. There could be other offers, too. Carter Copeland of Melius Research thinks a tie-up with Spirit, a larger aerospace supplier from America, would make sense. And several private-equity outfits, including the Carlyle Group, are thought to be preparing an offer. Either way, the future of GKN as a British-owned firm looks bleak. Even if Melrose bought the business, it would be likely to sell the aerospace unit to an American firm and the more valuable car-parts business to the Chinese or Japanese.

GKN is not the only British aerospace firm in trouble. BAE Systems, the largest, is doing well as deliveries of the F-35 fighter ramp up. But both Rolls-Royce, the next-biggest, and Cobham, a defence supplier in fourth place, have issued five profit warnings each in recent years. The latter two are specialising to survive. Rolls-Royce revealed on January 17th plans to sell off its civil marine operations, while Cobham may spin off its wireless units. Like GKN, Cobham is under pressure from investors because the government does not hold a golden share—as it does in BAE and Rolls—that can veto a takeover.

The pressure on suppliers is likely to intensify. In 2016 the margins of aerospace suppliers were ten percentage points higher than those of manufacturers, says Jim Harris of Bain & Company, a consultancy. And so now the likes of Boeing and Airbus are pushing down the prices they pay for parts to grab more profit. Other suppliers, including United Technologies and Rockwell Collins in America, are merging so that they can push back with their greater heft. As British suppliers are smaller, they are more vulnerable to consolidation.

But for whoever eventually buys GKN, selling on the aerospace business, in particular, will not be straightforward. The defence part of its aerospace work may be relatively small, but it is an integral part of several high-profile Western weapons systems, including the F-35. Using its strength in advanced composite materials, GKN makes several bits and pieces for the fighter, including the cockpit canopy and parts of the landing gear. Francis Tusa, a defence analyst, argues that America’s Department of Defence (DoD) would launch an “intrusive inspection” of any sale. In practice, GKN’s defence business could be sold only to a handful of buyers approved by the DoD, otherwise it might forfeit its licence to sell in America. The Swedish government also has an interest; GKN makes engines for its successful Gripen fighter.

The British government would also be worried about GKN disappearing into foreign hands. With Cobham vulnerable too, and Rolls slimming, this would hollow out Britain’s mid-sized defence industry. And it comes at a time when ministers are trying to inject more competition into defence procurement. Last September a new warship-building programme was unveiled, whereby shipyards will compete to build segments of a new frigate—the Type 31e—which will then be transferred to one site for final assembly.

Some argue that, without the economies of scale that a large contractor such as BAE can provide, this will lead to greater inefficiencies and push costs up. Maybe. But without the existence of these trusted British companies, competition would become ever more theoretical anyway.