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Wednesday, August 12, 2020

Derby City Council seeks talks with Rolls-Royce on reported job cuts

The Derby City Council is seeking talks with Rolls-Royce among reports that the main producer is ready to make thousands of job cuts, as reported in the Financial Times.

Over 8,000 jobs are said to go as the coronavirus pandemic hits the aviation industry.

The city council is trying to talk to Rolls-Royce about the engineering giant’s plans to deal with reduced engine demand as Airbus and Boeing cut aircraft production.

Paul Simpson, city council chief executive, said steps are essential to support Rolls-Royce, its employees and the largest aerospace supply chain across the region.

He said: “Rolls-Royce and the aviation industry as a whole are extremely important not only locally, but nationally.

“We will look for urgent talks with Rolls-Royce to find out what the city can do to support them. We will also see what help might be available to the aerospace supply chain, which also plays such an important role in Derby’s economy.”

While councilor Chris Poulter, leader of the Derby city council, said he would contact government ministers to find out how they could help.

He said: “The coronavirus pandemic and the resulting blockades to safeguard public health – although necessary in the past – have had a huge effect in many areas, but we know that aerospace has been among the hardest hit.

“Much of Rolls-Royce’s revenue depends on the maintenance of aircraft engines, but with such a low number of flights internationally, the work simply isn’t there.

“It is vital that Derby – and the UK as a whole – are with Rolls-Royce, its workers and others in the industry at this difficult time.”

Today, the United union has urged Rolls-Royce to “hold firm” and avoid short-term actions that could “hamper its emergency” from the Covid-19 crisis.

In a statement released Saturday, Rolls-Royce said it will provide further details on the impact of the coronavirus on its workforce size later this month.

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A Rolls-Royce spokesman said: “The impact of the Covid-19 pandemic is unprecedented.

“We have taken rapid action to increase our liquidity, drastically reduce our spending in 2020 and strengthen our resilience in these exceptionally difficult times. But we will have to take further action.

“We have to do this the right way, which means that we are working closely with our employees and union representatives and therefore we will consult with all the people concerned.

“We have promised to provide our people with further details on the impact of the current situation on the size of our workforce by the end of this month.”

Derbyshire Live’s sister site, Business Live, had previously reported how Rolls-Royce was introducing a series of cost-cutting measures to help the company save £ 750m due to the coronavirus crisis.

In a commercial update released to the markets on April 6, the company said it would cut the wages of its global workforce by at least 10%.

The salaries of its senior managers and executive team were expected to cut by 20% for the rest of 2020, including a 10% reduction and a 10% postponement in pay.

Rolls-Royce said it was also reducing discretionary costs, such as non-critical capital expenditure plans, consultancy, professional fees and subcontractor costs, stopping all non-essential travel and postponing external recruitment.

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