Rolls-Royce plans to temporarily close its aircraft car factories for two weeks this summer to preserve cash, which is the first time it has been forced into such a drastic step since it became a listed company in the 1980s.
The aircraft manufacturer is consulting unions and employee representatives at its civil aviation division, which manufactures aircraft parts, on how the shutdown will work as it cuts costs to deal with a prolonged aviation market crash due to the coronavirus pandemic.
The division has 19,000 employees worldwide in countries, including Germany and Singapore, although the majority – 12,500 – are based in the United Kingdom.
Rolls-Royce has also begun talks with British unions over a separate target to deliver a 10 per cent permanent improvement in productivity and efficiency at its UK civil aviation operations. It is primarily focused on its historic engine production facilities in Derby, but also smaller sites in Solihull, Tyne and Wear and Glasgow.
As reported by the Financial Times last year, staff are being warned for the first time about possible temporary plants in October. The company has now refined its plans for a two-week strike in the summer, though exact dates have yet to be finalized.
Rolls-Royce confirmed that it was the first time since the 1980s that it had taken such steps to reduce costs, although factories regularly closed during Christmas and its operations in the UK were suspended for a week while the company instituted measures to comply with Covid. 19 lead.
It acknowledged that the closures would be ‘disappointing for our colleagues’, but said they wanted to reduce the impact on their salaries by reducing them year over year.
Rolls-Royce is one of the companies launched since the launch of the UK government’s legal system last year, but said it would not use the employment retention scheme to cover the two-week closure period if it were introduced by the British chancellor Rishi is not extended. Sunak. The follow-up scheme is due to end in April.
The group has been grappling with how to overcome the deep and prolonged slump in aviation demand since the first wave of coronavirus shutdowns. The company announced last year that it would reduce at least 9,000 people with its 52,000 staff members to save £ 20 billion a year by the end of 2022, of which about 8,000 would be in the civil aviation division. So far, it has made about 7,000 retrenchments against the 9,000 target.
In January, the company warned that cash outflows this year would be worse than investors and analysts had expected as the new Covid-19 variants prolonged the crisis in international aviation.
Rolls-Royce declined to comment on the measures that could be involved in the 10 per cent long-term increase in production and efficiency, but said he had now started a complex and constructive dialogue with the union on how to achieve this.
The news of the closing of two weeks in the summer was first reported by The Sunday Telegraph.
General managers of three of the UK’s largest airports spelled out the crisis in the aviation industry on Sunday, claiming that Heathrow, Gatwick and Manchester together lost around £ 50 million a week as passenger numbers fell but their fixed costs such as business rates and policing remained the same.
In an article in the Mail on Sunday newspaper, Charlie Cornish, John Holland-Kaye and Stewart Wingate, the general managers of Manchester, Heathrow and Gatwick airports respectively, plead for more financial support for the sector.
They called on the chancellor to redistribute some of the £ 1.8 billion returned to the government by British supermarkets in ‘unnecessary easing of the business rate’, arguing that ‘most of the costs of running an airport cannot be turned off or turned off ‘.
This article has been corrected to reflect the extension of the UK Government’s Government Scheme to the end of April.