Select Committee on Trade and Industry Appendices to the Minutes of Evidence


Memorandum submitted by Rolls-Royce Joint Work/Staff Trade Unions, Derby Sites

  The Joint Works and Staff Trade Unions who represent the Derby Sites of Rolls-Royce plc are deeply concerned by the implications following the announcement by Rolls-Royce on 8 November 2000 that it is undertaking a major restructuring and rationalisation exercise.

  During his address on 8 November John Rose, our Chief Executive, also stated he believed that, to be the world's best, Rolls-Royce would need to out-source 85 per cent by value of its workload—currently we out-source 65 per cent. The Company have looked for possible opportunities and Joint Ventures but believe the maximum it could off-load is 75 per cent due to world capacity constraints. This 10 per cent increase represents a 30 per cent reduction of our Manufacturing base in the UK.

  The Company have stated on many occasions that to improve its cost competitiveness it needs to have a better balanced "Make-Buy" strategy in which it directs investment into those components in which it excels and which give the highest added value.

  The Trade Unions' view is that whilst accepting some of the Company arguments it is essential that we maintain and retain the Skills of our workforce, and retain the Technology and the Design Capability within the UK.

  Recent announcements by the Company bring into question the retention of said Skills and Capabilities. The movement of Great Design and Manufacture from Bristol to the USA, and the closure of the Composite Facility at Derby are just two examples where the Company are exporting jobs by Function to foreign-owned companies in foreign states.

  The Closure of the Composite Manufacturing Facility at Derby highlights to the Trade Unions the Company's lack of Investment in our Skills and Manufacturing Bases. The work done at our Derby Site is being transferred to an Austrian Company, Fischers, who we are told by Rolls-Royce are the world leaders in composite Component Manufacture. However recent reports which have come into our office bring into serious doubt this statement and they suggest that if the work was to be transferred today Fischers do not have either the Skills to do it, or in fact the Plant and Equipment to carry out the task.

  What this also highlights to the Trade Unions is that Rolls-Royce are entering into deals which not only have the effect of exporting jobs by Function but which also reduces our UK Manufacturing Base.

  The Trade Unions believe that this type of give-away affects all Rolls-Royce employees, not just those in Derby. If we cannot produce the components in line with Engine Delivery Dates it ultimately affects the Company's ability to win new orders and thereby safeguard not only UK Rolls-Royce employees' futures but also the futures of second and third tier Suppliers.

16 January 2001

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