The parent company of Rolls-Royce in Indianapolis is planning to reduce its global work force by 2,600 over the next 18 months. A spokesman with Rolls-Royce North America tells Inside INdiana Business the cuts will affect Indiana workers and are expected to take place early next year. The company currently employs 4,500 in Indianapolis. The reductions will impact administrative, operations, management and engineering positions. November 4, 2014
LONDON, England – Rolls-Royce today announces additional headcount reductions as part of an intensified programme to improve operational efficiency and reduce cost across the Group. We now propose a restructuring plan that will reduce headcount by 2,600 over the next 18 months, principally in our Aerospace division. The majority of this reduction will be achieved in 2015.
This is consistent with our announcement of October 17, when we committed to accelerate progress on the 4Cs: Customer, Concentration, Cost and Cash – particularly Cost. We will continue to pursue further cost improvements in all areas, including in our Land & Sea division.
The investment we have made in technology and new capacity, alongside the organisational changes we have made to simplify the Group, have enabled us to increase output and improve efficiency.
A large engineering team was required for the development phase of the Trent 1000 and Trent XWB engines. Both these major programmes have now entered their production phase, reducing our engineering requirement.
We have opened a number of world class new facilities, such as Crosspointe in the USA and in the UK at Rotherham and Washington, Tyne & Wear. These set new standards in productivity and efficiency and allow us to improve the competitiveness of our footprint.
The organisation of our Group into two divisions, Aerospace and Land & Sea, will enable us to reduce management layers and structural cost including indirect labour.
We anticipate these actions will result in incremental restructuring costs of around ?120m over the next two years. We intend to accrue around half of these costs this year, subject to employee consultation. We expect annualised cost benefits of around ?80m when fully implemented. Approximately half of this amount is in our 2015 guidance and the full benefit in our medium term outlook.
John Rishton, Chief Executive Officer, said:
“We are taking determined management action and accelerating our progress on cost. The measures announced today will not be the last, however they will contribute towards Rolls-Royce becoming a stronger and more profitable company.
We will work closely with employees and their representatives to achieve the necessary reductions on a voluntary basis where possible, while making sure we retain the skills needed for the future.”
Our business remains well positioned in growth markets.
About Rolls-Royce Holdings plc
Rolls-Royce's vision is to create better power for a changing world via two main business segments, Aerospace and Land & Sea. These business segments address markets with two strong technology platforms, gas turbines and reciprocating engines.
Aerospace comprises Civil Aerospace and Defence Aerospace. Land & Sea comprises Marine, Nuclear & Energy and Power Systems. On 6 May 2014 Rolls-Royce announced it had signed an agreement to sell its Energy gas turbine and compressor business to Siemens for a ?785m cash consideration. On completion, expected before the end of December 2014, Rolls-Royce will receive a further ?200 million for a 25 year licensing agreement.
Rolls-Royce has customers in more than 120 countries, comprising more than 380 airlines and leasing customers, 160 armed forces, 4,000 marine customers, including 70 navies, and 1,600 energy and nuclear customers.
Our business is focused on the 4Cs:
Customer – placing the customer at the heart of our business
Concentration – deciding where to grow and where not to
Cost – continually looking to increase efficiency
Cash – improving financial performance.
Annual underlying revenue was ?15.5 billion in 2013, around half of which came from the provision of aftermarket services. The firm and announced order book stood at ?70.4 billion at 30 June 2014.
In 2013, Rolls-Royce invested ?1.1 billion on research and development. We also support a global network of 31 University Technology Centres, which position Rolls-Royce engineers at the forefront of scientific research.
Rolls-Royce employs over 55,000 people in 45 countries. Over 17,000 of these are engineers.
The Group has a strong commitment to apprentice and graduate recruitment and to further developing employee skills. In 2013 we employed 379 graduates and 288 apprentices through our worldwide training programmes. Globally we have over 1,000 Rolls-Royce STEM ambassadors who are actively involved in education programmes and activities; we have set ourselves a target to reach 6 million people through our STEM outreach activities by 2020.
Source: Rolls-Royce plc