Rolls-Royce orders factory closures to save jobs

Rolls-Royce is hoping to prevent further rounds of job losses by shutting its factories for the first time ever this summer. 

The aerospace giant will close plants in its jet engine division for two weeks to save cash on salaries, energy and other costs. 

Rolls has already announced plans to axe 9,000 staff from its 52,000 pre-pandemic workforce. Around 7,000 of employees have been let go. 

But it is hoping the drastic action later this year means it will avoid needing to cut any further roles. 

Aerospace analyst Howard Wheeldon said the move ‘should secure skilled jobs’ at the company and that it was ‘perfectly logical’ to stall production for a short time. 

Wheeldon said: ‘They have to put every measure possible through to maintain the people they need. No one can be quite sure when the recovery in aerospace will come and anybody who thinks they know the answer to that is in cloud cuckoo land.’ 

Rolls gets paid for the hours its engines are used on planes such as Boeing 787s and Airbus A350s. The collapse in air travel since early 2020 means that it has lost one of its key revenue streams. In August it swung to a dizzying £5.4billion first-half loss. Annual figures are released next month. 

Although Rolls works in other areas such as nuclear energy and defence, it usually makes around half of its turnover from the civil aerospace division. 

Dates for the two-week shutdown have not been decided yet by chief executive Warren East. It will affect all 19,000 staff in its civil aerospace arm worldwide – though the bulk of these operations are concentrated around its Derby HQ. 

Rolls has about 12,500 UK employees. The company, which said it is in ‘complex and constructive discussions’ with unions, will spread the two weeks’ pay employees will lose during the shutdown across the year. 

Rolls was forced to halt manufacturing for a week at the start of the pandemic last year. It previously promised not to announce any new job losses until 2022. But it warned last month that its finances had been set back further by the second wave hitting travel again. 

The travel industry believes short-haul flying should be back at 2019 levels by 2023. But this is not expected for long-distance routes, which use the large aircraft Rolls supplies, until 2025. 

Many manufacturing companies, for example car makers, shut down their factories during quiet periods. 

As well as cutting jobs in its restructuring, the company raised £5billion last year, partly by selling new shares. It aims to sell off businesses and divisions worth another £2billion.