Rolls-Royce to close factories temporarily, cut benefits: Report

A Rolls-Royce factory in Derby, England, in 2016. Staff at a plant in Barnoldswick, Lancashire, are reportedly planning a strike. PHOTO: AGENCE FRANCE-PRESSE
A Rolls-Royce factory in Derby, England, in 2016. Staff at a plant in Barnoldswick, Lancashire, are reportedly planning a strike. PHOTO: AGENCE FRANCE-PRESSE

LONDON • British aero-engine maker Rolls-Royce Holdings plans to temporarily close factories, and cut working hours and benefits as part of new cost-cutting measures, the Financial Times reported on Monday.

The group also faces strike action at one of its oldest plants, in Barnoldswick in Lancashire in Britain, in protest at proposals to shift some production to Singapore, the Financial Times said.

Rolls-Royce staff were notified last week by e-mail that the company was looking at new measures in its current cost-cutting drive to cope with the collapse in aircraft demand in the aftermath of the Covid-19 pandemic, the report said, citing a source.

While confirming the e-mail, Civil Aerospace head Chris Cholerton said the company intends to cut management costs by a third, but no new job cuts have been planned beyond the 9,000 announced earlier this year, the report stated.

A Rolls-Royce spokesman said in an e-mailed statement to Reuters that the company plans to update staff in the coming weeks on proposals that are part of the restructuring plan announced in May.

The Financial Times also said that staff at the Barnoldswick plant are planning three weeks of targeted strike action from Nov 6.

To offset the effect of the Covid-19 pandemic, which has stopped planes flying and hammered the company's finances, Rolls-Royce was to ask shareholders yesterday for £2 billion (S$3.5 billion).

Investors are expected to back the rights issue, supporting chief executive Warren East's plan to cut 9,000 jobs and close factories.

The Straits Times has contacted Rolls-Royce for a comment on how the latest moves will impact its Singapore operations.

REUTERS

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A version of this article appeared in the print edition of The Straits Times on October 28, 2020, with the headline Rolls-Royce to close factories temporarily, cut benefits: Report. Subscribe