Melrose has announced a compensation programme worth up to 100 million US dollars (£73.4 million) for residents and businesses affected by a chemical incident at its GKN Aerospace facility in Garden Grove, California. The FTSE 100 company said the programme will cover damages linked to the May evacuation order, including costs such as hotel stays, meals, transport and lost wages. The claims process is expected to open in the coming weeks and remain available until 2027.
Compensation Programme Follows Emergency Evacuation in Garden Grove
The incident occurred at the end of May when an overheating chemical tank at the GKN Aerospace Garden Grove site triggered an emergency response and the evacuation of parts of the surrounding area.
According to Melrose, the company has worked with regulators, local authorities and other relevant organisations to review the event and prepare the facility for a safe return to normal operations. The company said the chemical tank involved in the incident has been permanently decommissioned and that safety improvements have been made at the site.
The Orange County District Attorney’s Office (OCDAO) has closed its criminal investigation into the incident and will not bring criminal charges, according to Melrose. The company said the claims programme announced for residents and businesses is separate from costs claimed by emergency services agencies and any potential civil enforcement penalties.
The programme is intended to address losses experienced by those affected by the evacuation order. Melrose has not provided further details on the number of claims expected or the final cost of the compensation process.
Financial Impact Remains Under Review as Production Restart Approaches
Melrose said it plans to restart full manufacturing operations at the California facility on 28 September. The site is operated by GKN Aerospace, which produces components for military aircraft, helicopters and civil aircraft.
The company previously warned that the incident would create additional costs in the second half of 2026. According to Melrose, these costs are expected to reach between £25 million and £30 million, alongside the impact of operating the facility at reduced capacity.
The disruption also affected the company’s financial results. Melrose reported that the incident reduced interim revenue by £16 million and adjusted operating profit by £9 million. The company had also paused its £175 million share buyback programme while assessing the financial consequences.
Despite the impact of the incident, Melrose reported an 18% increase in half-year adjusted earnings and a 10% rise in sales last month. The company said its insurance position relating to the event remains under review.
GKN Aerospace has co-operated with investigations into the incident, including the review carried out by the OCDAO. The company said the latest developments represented a step towards resolving the remaining matters connected with the event. The compensation programme marks the next stage in addressing the consequences of the evacuation, while Melrose continues work towards restoring full operations at the Garden Grove facility.
