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Rolls-Royce to cut 400 jobs, most in Indianapolis

Kathleen McLaughlin
January 9, 2014
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Rolls-Royce North America will cut about 400 jobs from its global defense business, most of them in Indianapolis, the company told employees Thursday.

 “Our customers are responding to an environment of reduced defense budgets and are demanding greater efficiencies,” Tom Bell, president of the global defense business unit, said in a prepared statement. “While it is never an easy decision to make reductions in our workforce, it is a sign of the increasingly competitive market in which we operate that such actions are necessary to ensure we can drive new business.”

The jet engine maker hopes employees will accept buyout offers, which the company would not characterize as early retirement. The offers will be made to a mix of salaried employees and manufacturing workers, the company said.

Rolls-Royce declined to disclose the exact number of jobs that are on the chopping block at its downtown offices and Tibbs Avenue factory.

The company received tax breaks in 2012 based partly on a promise to maintain its local work force, which is about 4,600 people. The city of Indianapolis offered Rolls-Royce a $23 million, 10-year tax abatement based on retained jobs and investment in both its downtown and west-side properties. The company planned to invest $22 million in a former Eli Lilly and Co. office building dubbed Meridian Center and another $190 million in the Tibbs Avenue plant.

A company spokesman said Rolls-Royce is in compliance with that agreement, but the impact of buyouts or layoffs will have to be assessed at a later date.

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  • Not sequestration
    VS - This has nothing to do with sequestration, and everything to do with RR's effort to move away from a unionized labor force, as already noted by Justin, Byron and RR worker. This effort has been underway for the past decade.
  • Layoff
    Rolls cannot blame business, they consistently turn a larger profit each year including last year. They are taking away higher paying jobs away from Indianapolis and hiring at the Cross point facility in Virginia, at considerably lower wages and no Union. And they are not holding up their end of deals with the city, nor contractual promises, we have given benefit concessions, profit sharing, allowed 2 and 3 tier employees that make lower wages, less benefits, and no pension. Not only have they not brought new work in, they have outsourced much of our work to less competent facilities; makes one leary of flying. Sadly most of the downturn began when we hired our first American CEO/CO, John Gallo.
  • RR worker
    right now at Rolls, there is a lot of outsourcing going on too. My department is being elimminated due to the parts we have made for years being outsourced.the outsourced parts are not any better made or any cheaper but the company has taken the stance that they are going to send the work out no matter what it costs. just remember the next time you fly that engine on your plane was built by the lowest bidder.
  • Sequestration
    JJ - do you not understand that the sequestration was designed to take 50% of the total reduction from defense spending? Obama made sure that no deal was made thus assuring a major decrease (not in welfare etc.) but in national defense. This is a direct result of Obama's actions, it should be no suprise that all defense contractors are reducing employment, including the one in your back yard.
  • Unions
    This is not a statement of right or wrong, but it's all about the unions. They are opening new factories which aren't unionized and moving the office staff downtown to separate them from the unionized factory so that it can be slowly phased out of relevance.
  • Guns or Butter?
    Seems like a basic Economics Problem to me. Either RR makes guns or diversifies and makes butter. If a company makes millions from defense and military spending and the US Military is not invading or occupying a sovereign foreign nation somewhere in the world, then the purchase orders for military equipment will fade away.
  • The real scoop
    Sounds like RR had a business reason for this, although I heard from someone inside the firm that they're consolidating this particular operation in a southern state with a little more favorable business environment than Indiana. Seems like a lot of Hoosiers confuse "being better than Illinois, Michigan and Ohio" with being "good."
  • Typical
    As usual we give the big bucks to a company and we in return get the shaft.
  • hope and change
    More and more people are getting laid off. I thought that this wasn't suppose to happen.
  • Huh?
    "A company spokesman said Rolls-Royce is in compliance with that agreement...". Come again? I'm no rocket scientist (see what I did there?), but if you're CUTTING 400 jobs, "mostly in Indianapolis", how are you possibly maintaining the local workforce? That's one spokesman who needs to work on his communication skills...
  • It worked for St v's
    Let me see, mayber if RR get rid of hundreds of workers, the state and city will give them more money to hire back half of the workforce. This is republican ecomonics.

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