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Rolls-Royce Announces Business Re-organisation

9 November 2000

Rolls-Royce Announces Business Re-organisation

    LONDON, Nov. 9 Rolls-Royce plc, the aerospace, marine and
energy power systems company, today, (9 November) announced further plans to
continue the re-organisation of its business.
    The plans include concentrating its Energy business large gas turbine
operations in Montreal. Today, these activities are principally located at
Ansty, near Coventry, and Montreal, resulting in complexity which raises
operating costs and prevents the best use of engineering resources.  Assembly
and test of Rolls-Royce industrial gas turbines already takes place at
Montreal and the site has recently seen considerable investment in new testing
facilities.
    The company is also proposing to consolidate its Naval Marine business for
surface vessels in Bristol. This business is currently located in three
places:  Derby, Ansty and Bristol.  Bristol is seen as an ideal centre because
of its proximity to the major UK customer, the Ministry of Defence.
Consolidation will also provide opportunities to improve customer support and
engineering through synergies with the Defence (Europe) business already
located in Bristol. The company's Nuclear Marine business will remain based in
Derby.
    Rolls-Royce is constantly reviewing how it should re-shape its supply
chain -- what it should manufacture and what components and services it should
buy in. This ensures that focus is maintained on achieving world-class
standards in design and manufacture of components, whether outsourced or made
by Rolls-Royce.
    Rolls-Royce will continue to invest in manufacturing activities where it
can achieve world-class performance.  This policy will be reinforced by
creating a series of Centres of Excellence for component design and
manufacture.
    The company's operations at Ansty, where 2,400 people are employed, will
be affected by:

    -- the proposed transfer of Energy research and development and operations
       to Montreal

    -- the consolidation of Naval Marine engineering and customer support at
       Bristol

    -- the review of operational activity in all locations, including Ansty.

    The Aero Repair and Overhaul business, which currently employs 550 people
at Ansty, will remain in Ansty and is well positioned to continue its growth.
    The potential number of Rolls-Royce jobs affected by the above is 1,300,
ie 600 in the Energy business, 50 in Marine and 650 in Operations.  However,
the impact will be less with the prospect of up to 300 jobs in Bristol,
Montreal and Derby, and further opportunities in Derby if the Trent 600 and
900 programmes are committed.  Some jobs will also transfer to the Repair and
Overhaul business.
    The company is also carrying out a review of its engineering capabilities
with a view to using this resource more effectively, co-locating it wherever
possible with the relevant Rolls-Royce business.
    John Rose, Chief Executive of Rolls-Royce, said: "The re-organisation of
Rolls-Royce will continue as we shape the business to meet market demands. The
reduction in jobs in 2001 will continue at a rate no greater than in the last
year or so. But in the re-organisation programme as a whole, there will be
different impacts in different locations and it is inevitable that some
activities will decline and others will rise. The company will devote very
substantial resources to help train and re-deploy where changes in roles occur
and will do all it can to re-deploy and retain people in employment."
    These proposals will be the subject of full consultation with employees'
representatives, beginning immediately.