Rolls-Royce reviews civil aerospace footprint

Rolls-Royce is proposing to increase the scope of ITP Aero’s supply chain activity, engineering and manufacturing capabilities.

This comes as part of the ongoing detailed review of its Civil Aerospace facility footprint, as it focus on protecting key skills and technologies, reducing costs and positioning its business for recovery from the dramatic impact of the COVID-19 pandemic on global commercial aviation.

According to the company, the actions proposed will enhance the position of ITP Aero, currently wholly-owned by Rolls-Royce, as a major global aerospace company that will, in future, be able to compete for business from other players in the aerospace industry and target new opportunities.

On May 20, 2020 the company announced a major restructuring, predominantly of its Civil Aerospace business, to achieve total annual pre-tax cash savings of at least £1.3bn by the end of 2022.

“As part of the restructuring, we are reviewing our global footprint. Today we are providing an update to our people on further proposals from this extensive review.

“First, we are proposing to transfer our facility and workforce in Hucknall, UK, into 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 Rolls-Royce said in statement.

The company is also proposing to consolidate the manufacture of aero-engine structures into ITP Aero. Due to the significant reduction in global demand for its products and services from commercial aviation customers, which is forecast to last several years, the company is to reduce its manufacturing capacity and cost base in order to protect the remaining workforce.

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“ITP Aero, currently undergoing its own restructuring, offers a more cost competitive option than our existing structures facility in Barnoldswick, UK. We are commencing consultation on a proposal to close the structures facility on the site. While this will be hugely upsetting news for our colleagues in Barnoldswick, this does not mean we are closing our Barnoldswick site. Following our proposal in August to relocate part of our fan blade manufacturing, Barnoldswick will 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.

“As announced alongside our half year results in August, we have identified a number of potential disposals that are expected to generate proceeds of more than £2bn in order to strengthen our balance sheet, and these include ITP Aero.”

The company is also carefully examining its business operations in Inchinnan, Scotland and Ansty, UK.

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.”

“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.”

Source: Aviationghana