9 December 2020: As a part of the major restructuring of the Civil Aerospace business, Rolls Royce will enhance the position of ITP Aero as a major global aerospace company. Rolls Royce has announced about this restructuring in May 2020 to recover from the COVID-19 pandemic and to achieve total annual pre-tax cash savings of at least EURO 1.3bn by the end of 2022. Currently ITP Aero is wholly-owned by Rolls-Royce. With this transition, ITP Aero will be able to compete for business from other players in the aerospace industry and target new opportunities. Rolls Royce will increase the scope of ITP Aero’s supply chain activity, engineering and manufacturing capabilities as a part of their ongoing detailed review of Civil Aerospace facility footprint.
Chris Cholerton, President – Civil Aerospace, said: “Since the beginning of the pandemic we have taken swift action to protect our business by both reducing our spending and costs, and by raising additional funds. But despite the prospect that business will eventually return to normal, sparked by recent news of vaccines, the pandemic has created a once-in-a-generation shock to the whole of commercial aviation and it is going to take years to recover. By completing the restructuring of our Civil Aerospace business we can emerge as a stronger, more efficient and sustainable business able to tackle some of the world’s toughest technological challenges.”
Restructuring process will involve protecting key skills and technologies, reducing costs and positioning the business for recovery. Firstly the facility and workforce in Hucknall, UK will be transferred to ITP Aero. Hucknall, which manufactures a range of aero-engine parts, will bring ITP Aero new capabilities and become a critical part of the enlarged business, helping to secure the future of the site. As part of ITP Aero, the Hucknall site will, in future, have the potential to unlock new growth and investment opportunities.
The next proposal is to consolidate the manufacture of aero-engine structures into ITP Aero. With the COVID-19 pandemic, there is a significant reduction in global demand of products and services from commercial aviation customers. The effects of this are predicted to be long term, therefore, there is a need to reduce the manufacturing capacity and cost base to protect the workforce.
ITP Aero, currently undergoing its own restructuring, offers a more cost competitive option than the existing structures facility in Barnoldswick, UK. Therefore the next proposal is to close the structures facility in Barnoldswick. Barnoldswick will however be the home of a product development and technical support centre for wide chord fan blades and continue to manufacture blades for a range of Defence and Civil Aerospace applications.
“The proposals we are laying out today will provide an opportunity for our workforce in Hucknall to benefit from being part of an enlarged global aerospace leader that can compete for business with other engine manufacturers. But I understand that the announcement will be hugely upsetting for our colleagues in Barnoldswick. This is a very difficult proposal to make, but we cannot afford to retain every Rolls-Royce factory that was supported by demand that has been dramatically reduced by the pandemic. No government support scheme can replace sustainable customer demand and no government can sign-up to extending the sort of short-term measures we have been very grateful for, over multiple years,” Cholerton further added.
“The impact and pain of the pandemic on Civil Aerospace is not only being felt by our colleagues in the UK. We have already announced proposals to unfortunately reduce our Civil Aerospace workforce in Germany by almost a quarter due to the reduction in demand from customers, while in Singapore several hundred jobs have been impacted as part of our global restructuring and we are consolidating the assembly and testing of our widebody engines into the UK. We have also announced the closure of a whole Civil Aerospace manufacturing site in the US, which is less than a decade old, and the work it used to carry out will now be done in the UK,” Cholerton concluded.
