Summer Shutdown Planned By Rolls Royce To Cut Losses

Rolls Royce is planning a closure of its jet engine making factories for civil aircraft for a period of two weeks in order to reduce losses. With lesser number of jets in the air because of the Cvoid-19 pandemic also meant less service and consequently a drop in sale revenues for the engineering giant.

According to reports, the closure plans are still tentative because of the company also wants to strike an agreement with the unions on the issue.

Work at the defence or energy divisions of the company will not be affected by the plan which was first reported in the Sunday Telegraph.

“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,” it added.

The company has not yet set any date for the closure and it plans to disperse the hit to employee wages throughout the course of the entire year. if the closure takes place, it would be the first for the company since at least the 1980s when the company was taken back private.

The company said that it was trying to avoid a blanket use of the furlough scheme.

“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,” it added.

The company expects to burn through more cash this year than it had previously predicted since the pandemic will force less planes powered by its engines to fly, the company had said last month.

Despite the company already implementing cost curtailments for billions of pounds, it still expects to burn a total of about £2bn of cash for the current year which would be double the amount it has predicted previously.

The company generates revenues on the basis of the number of hours its engines are in use and since air travel has reduced significantly during the pandemic, its revenues have also been hit.

The company has also said that it was finding it hard to make predictions because of the new strains of the coronavirus.

(Adapted from

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