Rolls Royce considering shutdown of jet engine plants to curb losses

rolls-royce-considering-shutdown-of-jet-engine-plants-to-curb-losses

Rolls Royce, the renowned British engineering firm, is reportedly contemplating plans to close down its civil aircraft jet engine factories for a duration of approximately two weeks in a bid to curb losses.

As per reliable reports, Rolls Royce has suffered a drastic fall in sales during the pandemic with lesser jets in the air that need servicing.

The plans are unconfirmed because the firm aims to discuss an agreement with the unions first. Additionally, it has been clarified that this plan would not affect its energy or defense divisions.

Rolls Royce stated that under the agreement it reached last summer with the union, in principle it agreed to enter negotiations with regards to deliver nearly 10 per cent productivity as well as efficiency improvement in its Civil Aerospace operations across the UK.

The engineering giant added further that it has now started complex and useful discussions with the union on how this could be attained. As of now, no date for the shutdown has been set and Rolls Royce intends to spread the wage hit through 2021.

This would be the very first temporary shutdown for the engineering firm since the 1980s, when the company was re-privatized. Rolls Royce is shying away from complete use of the furlough scheme.

The firm added that it is continuing to utilize the UK Government CJRS (Coronavirus Job Retention Scheme) as well as other such schemes elsewhere across the globe, in Civil Aerospace areas where the workload has substantially decreased mainly because of coronavirus pandemic.

But, claiming temporary furlough unilaterally for all the employees in the UK Civil Aerospace business in a pre-planned way is not in line with the intent, nor is it within the true spirit of the scheme, as the workload is not affected in all parts.

The firm, already dropping billions of pounds in costs, predicts £2 billion of cash to leave the business in the current year, nearly more than double estimates. Furthermore, the new coronavirus strains are also making estimates much harder.

Source credit: https://www.bbc.co.uk/news/business-55974073