Bristol Rolls-Royce jobs under threat as aero-engine maker confirms 4,600 redundancies

June 14, 2018

Aero-engine giant Rolls-Royce yesterday confirmed that workers based at its major Bristol plant will be among the 4,600 to lose their jobs over the next two years.

In what the engineering giant described as a “fundamental restructuring”, 3,000 mainly middle-management and administrative posts will be shed by mid-2020 from its 22,000-strong UK workforce, including around 1,000 by the end of this year. 

While its Derby operations, which predominately manufacture engines for civil aircraft such as those made by Airbus, will be hardest hit, Rolls-Royce said some corporate and support jobs would go at its Filton plant, its second largest site and which employs around 3,000 people mainly making military aero-engines.

The Unite union said it would press for no compulsory redundancies at the plant. 

The firm, which has a total global workforce of around 55,000, did not break down the job losses by individual plant. It is the largest round of redundancies at Rolls-Royce in nearly two decades.

As well as manufacturing and assembling engine parts, including for the Eurofighter Typhoon and Airbus A400M transporter, the Filton plant is also a world leader in short take-off/vertical landing (STOVL) engine technology and is working with the US manufacturers of the F-35 Joint Strike Fighter Lightning II, which has recently been introduced to the RAF, on its STOVL version.

The plant, which has been the subject of a multi-million pound investment by Rolls-Royce over the past two decades, also builds the MT30 engines that power the Royal Navy’s new Queen Elizabeth Class aircraft carriers as well as the Type 26 frigates. Several hundred jobs were axed at the plant in 2015 as part of a previous restructuring programme. 

Rolls-Royce said the job cuts were part of a wider transformation of the business which would deliver improved returns, higher margins and increased cashflow. It said the move, which Rolls-Royce hopes to save £400m a year by 2020, would help tackle “overlapping activities between individual business units and a large corporate centre”.

But Unite warned the company against cutting “too deep and too fast” and inflicting a “dire economic” impact on communities reliant on Rolls-Royce jobs.

Last year unions representing workers at is Midlands plants secured a guarantee of no compulsory redundancies linked to investment in its civil aerospace facilities.

Unite yesterday said it would be seeking similar guarantees for its members affected by today’s announcement who were not covered by that collective agreement. 

Rolls-Royce chief executive Warren East said: “Our world-leading technology gives Rolls-Royce the potential to generate significant profitable growth. The creation of a more streamlined organisation with pace and simplicity at its heart will enable us to deliver on that promise, generating higher returns while being able to invest for the future.

“We have made progress in improving our day-to-day operations and strengthening our leadership, and are now turning to reduce the complexity that often slows us down and leads to duplication of effort.

“It is never an easy decision to reduce our workforce, but we must create a commercial organisation that is as world-leading as our technologies. To do this we are fundamentally changing how we work.

“These changes will help us deliver over the mid and longer-term a level of free cashflow well beyond our near-term ambition of around £1bn by around 2020. After a decade of significant investment we are committed to delivering improved returns while continuing to invest in the innovation needed to realise our long-term aspiration to be the world’s leading industrial technology company.”

Unite assistant general secretary for aerospace Steve Turner said: “This announcement will be deeply unsettling for Rolls-Royce workers and their families and could have a dire economic impact on local communities reliant on Roll-Royce jobs.

“There is a real danger that Rolls-Royce will cut too deep and too fast with these jobs cuts, which could ultimately damage the smooth running of the company and see vital skills and experience lost.

“Unite will be offering our members maximum support through this process and seeking assurances on no compulsory redundancies from Rolls-Royce for Unite members affected by this announcement.

“Over the coming days Unite will be working with Rolls-Royce, relevant agencies and other employers to find people affected alternative employment and to retain skills in the aerospace sector.”

Nicholas Hyett, an equity analyst at Bristol-based Hargreaves Lansdown, added: The reshuffle follows a tough time for Rolls, with CEO Warren East admitting the company was fighting for survival just a few years ago. A slimmer, more efficient Rolls-Royce is good for UK aerospace in the long run, though job losses along the way mean the journey comes with a cost.

“The group is effectively spending £500m in the next three years to save $400m a year thereafter, and a reduction in the size of the centre reflects the group’s new three pronged structure.

“New aero engines mean order books are looking healthier and the group has done well to limit the financial impact of issues relating to in-service Trent 1000 engines. Improved cash generation following the restructuring should strengthen the group’s financial position going forward, but there’s no getting away from the fact that Rolls is still a capital intensive business in a pretty competitive industry.”

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