Authorization

Rolls-Royce cost-cuts claim key executive's job and the engineer's London base

A crackdown on spending at Rolls-Royce as boss Warren East leads a harsh cost-cutting and restructuring programme has claimed a high-profile scalp, with a top executive to go after less than two years with the blue-chip engineer.
An internal memo from Mr East revealed that Simon Kirby, the chief operating officer, is to leave the business in June, after just 19 months in the job.
Mr Kirby was poached from rail project HS2 – where he was to paid ?750,000, making him the UK’s best paid civil servant – to head a shake-up at Rolls.
His appointment was deemed vital to slimming down Rolls’s bloated structure, which had contributed to a run of profit warnings that saw the group's share price crash and led to Mr East being parachuted in three years ago to oversee the company’s recovery.
In the memo, the chief executive acknowledged Mr Kirby’s contributions, which have included clearing out several management layers and reducing the company from five divisions to three.
Rolls-Royce cost-cuts claim key executive's job and the engineer's London base

Chief operating officer Simon Kirby is heading for the exit after less than two years at Rolls-Royce

Credit:
PA
Thanking the chief operating officer for his work, Mr East said it was a “sign of [Mr Kirby’s] professionalism and integrity that he played a key role in an initiative that has resulted in his own role being eliminated”.
Other measures to slim down the business include selling the L'Orange fuel injectors unit for €700m (?615m), and hanging a "For Sale" sign over the under-performing marine business.
The drive by Mr East to cut costs has been intensified by growing troubles with the company’s latest Trent 1000 engine, which has problems with parts wearing out much faster than anticipated.
An estimated ?1bn price-tag has been put on the cost of inspections of affected engines, work to rectify them and potential compensation to airlines whose aircraft have been grounded as a result.
Mr East added that the Trent 1000 issues are “adding to an already challenging cash position”.
Rolls-Royce cost-cuts claim key executive's job and the engineer's London base

Rolls-Royce faces a ?1bn bill from troubles with its Trent 1000 engines

Credit:
PA
Reining in spending was underlined in the memo with the chief executive telling staff the company had stopped “many areas of non-essential expenditure. Please do everything you can to reduce costs now to only essential areas.”
Part of this policy will see Rolls look to leave its Westminster office, an area it has been based in since the Seventies.
The company is expected to seek new offices for around 100 London staff near King’s Cross, with a move likely next year.
Office space at King's Cross is cheaper than Westminster and the nearby train station has services direct to Rolls’s Derby headquarters.
Rolls Royce shares March 2017
The announcement also hinted that Rolls was making progress towards Mr East's target of generating ?1bn in cash a year by 2020 – a measure he feels is a better gauge of the company's progress than profit. 
Rolls, the chief executive said, "remains broadly on track to the targets we committed to at the start of the year", but said the spending squeeze was essential to "overcome headwinds to make 2018 a breakthrough year".
See also:
Leave a comment
News
  • Latest
  • Read
  • Commented
Calendar Content
«    Август 2018    »
ПнВтСрЧтПтСбВс
 12345
6789101112
13141516171819
20212223242526
2728293031