Fears for North Rolls-Royce jobs
Jan 12 2008 by Iain Laing, The Journal
MORE than 400 Rolls-Royce workers in Sunderland are worried for their jobs after the aero engine giant revealed plans to axe up to 2,300 jobs.
The group said the cost-cutting would affect the UK, US and Europe, but declined to confirm how many jobs would be cut in the UK where it has 23,300 staff. It said it would seek to secure voluntary redundancies where possible.
The engineering firm, which has more than 400 staff at its Wearside aero engine part plant, said managerial, professional and clerical roles would be affected. It added that the cuts would focus on overhead and support functions in the UK, US, Germany, the Nordics and “other countries where the relevant functions are located”.
The headcount reduction will help the group offset higher costs in raw materials as well as the weak US dollar, according to Rolls.
The group said on unveiling half-year results in July that the decline in the strength of the dollar had cost it £40m in additional costs, while it was also seeing a rise in unit costs from increased raw materials.
It said at the time that it would seek to tackle the rising cost pressures by increasing its dollar-based sourcing, overhauling its supply chain and achieving productivity efficiencies from its investment in new manufacturing bases.
But Rolls was still able to post a better-than-expected 17% hike in interim underlying pre-tax profits, at £380m, despite the cost rises.
Rolls-Royce chief operating officer Mike Terrett said: “We are determined to create a leaner and more agile support structure, better suited to the global markets in which we operate.
“The investments we have already made in new management systems will help us deliver this simplified organisation. Rolls-Royce will continue to focus on ongoing cost reduction and productivity improvements.”
The company stressed that today’s job reductions would not hit its 2007 financial results and said that associated costs in 2008 would be largely offset by savings made group-wide.
Bernie Hamilton, national officer of the Unite union, said: “We understand the competitive nature of the aerospace sector and the disproportionate effect that the weakened dollar against the pound is having on the industry. Unite will do everything it can to help the company remain competitive, recognising that this announcement comes at a time of a healthy order book and recent successes in gaining new orders. Any jobs lost are disappointing but we will not accept any attempt to make compulsory redundancies.”
Rolls-Royce is the biggest employer in Derby, with a workforce of 12,000, and union representatives there are to “seek clarification” on where the cuts will be made.
