`

Throttling up for big job cuts at Rolls-Royce?: Local impact of international job reductions isn't clear

February 4, 2008

The more than 4,000 employees at the region's second-largest manufacturer are waiting to learn whether some will lose their jobs. Rolls-Royce Group PLC plans to cut up to 2,300 U.S. and European positions.

The British aerospace company on Jan. 11 said it plans to slash its work force by almost 6 percent among managerial, professional and clerical ranks.

It blames rising raw material costs and the declining value of the U.S. dollar.

First-half 2007 profits of $600 million were roughly half that for the same period in 2006.

Rolls-Royce's primary manufacturing facility in North America is at 2001 S. Tibbs Ave. It's the largest manufacturer locally behind pharmaceutical giant Eli Lilly and Co.

Local executives aren't yet sure what the impact will be here because Rolls-Royce must assess how many employees company-wide may depart voluntarily, said Maria Weber, Indianapolis spokeswoman.

Rolls employs about 8,300 in the United States. As of late last year, Rolls had a total of nearly 40,000 workers, including 23,300 in the United Kingdom.

The corporate job cuts are the second cloud to appear over local operations in less than six months.

Last November, Indiana and several other states lost out to Virginia as the location for a new, $300 million plant to make the Rolls-Royce RB282 engine to power a midsize corporate jet for Francebased Dassault Aviation SA.

It's not clear exactly what Indiana offered, but Virginia pledged incentives worth $57 million. Rolls-Royce also cited Virginia's superior educational infrastructure.

Observers also noted that it didn't hurt politically for Rolls to bring new jobs close to the U.S. Capitol, where the company lobbies Congress for military contracts. Rolls' North American headquarters are in Chantilly, Va., near Washington-Dulles International Airport.

The selection of Prince George County for the new plant, on a 1,025-acre site, has raised concern among local workers that Indianapolis will, over time, cede work to the high-tech factory set to open next year.

Though initial reports stated that Rolls-Royce would employ fewer than 200 workers in Virginia and invest a few hundred million dollars, officials in that state said the investment could grow to $500 million and 500 jobs over time.

Bob Woodcock, head of the Rolls-Royce unit of United Auto Workers Local 933 in Indianapolis, noted that the Virginia facility will be making an all-new type of engine.

The RB282 is larger than the AE 3007 engines made at the Tibbs factory for Embraer regional jets and for the Citation X.

"Naturally, we had hoped to get the engine plant" here, he said.

In recent months, Indianapolis celebrated Rolls' victory in securing production of the F136 engine for the Joint Strike Fighter, the latest generation of military aircraft. But according to Aviation Week, the new Prince George County plant will have the ability to make a "blisk" for the F136 engine--a component composed of a rotor and a blade that is machined from a solid piece of metal.

Indiana state officials had even been hopeful last year that they could also lure production of one of the company's large engines for the Boeing 787 and for the Airbus A350.

But no state pulled down that work: Rolls announced that the engines would be made in Singapore.

Other than the losses to Singapore and Virginia, the local plant has been on a roll in terms of lining up new business.

In mid-2006, Rolls-Royce announced it would spend $150 million to expand its engineering center here expected to bring 600 jobs.

And last summer, Rolls said its Indianapolis research center lassoed a nearly $300 million contract to develop a superefficient engine-adding at least 120 jobs.
Source: XMLAr00500.xml
ADVERTISEMENT

Recent Articles by Chris O\'malley

Comments powered by Disqus