Rolls Royce plans summer shutdown to help cut losses
Rolls Royce is considering a plan to close its jet engine plants for civil aircraft for two weeks in a bid to stem losses.
The engineering giant has suffered a drop in sales with fewer jets in the air requiring servicing. The plans are tentative as the company aims to thrash out an agreement with unions. The plan, first disclosed by the Sunday Telegraph, will not affect its defence or energy divisions. "As part of the agreement reached with the union last summer we agreed in principle to enter into negotiations about delivering a 10% productivity and efficiency improvement across our Civil Aerospace operations in the UK," Rolls Royce said in a statement. "We have now begun complex and constructive discussions with the union on how this can be achieved." No date has yet been set. The company aims to spread the wage hit through the year. It would be the first temporary shutdown for the firm since at least the 1980s, when the firm was re-privatised. The company is shying away from a blanket use of the furlough scheme, it said. "We are continuing to use the UK Government Coronavirus Job Retention Scheme - and similar schemes elsewhere in the world - across areas of Civil Aerospace where workload has significantly reduced as a result of Covid," it said. "However, unilaterally claiming furlough for all employees across the UK Civil Aerospace business in a pre-planned way is not consistent with the intent - nor is it, we believe, within the spirit - of the scheme, as workload is not impacted across all areas." Last month the company said it expects to get through more cash than expected this year because planes powered by its engines fly less amid the pandemic. The company, already slashing billions of pounds in costs, expects £2bn of cash to leave the business in 2021, more than double forecasts. It is paid on the number of hours its engines are in use, so the Covid restrictions hit its revenues. New strains of the coronavirus are also making predictions harder, it said at the time.