Rolls Royce accused of 'shameful opportunism' as Scottish jobs at risk in £1.3bn cuts drive

The aerospace giant, Rolls-Royce, has been accused of “shameful opportunism” after announcing plans to cut at least 9,000 jobs, sparking fears for those employed at its sites in Scotland.

Around 820 staff are based at the Rolls Royce plant in Inchinnan, Renfrewshire. Picture: Ross MacDonald / SNS Group

The firm, which has a manufacturing plant in the Renfrewshire village of Inchinnan, said it was undertaking a major reorganisation of its business, amid a slump in demand for aircraft and engines during the Covid-19 pandemic.

Its chief executive, Warren East, acknowledged it was “terrible news” for employees, but added that action has to be taken to protect the business in the long term.

It is unclear where at which of its sites the company plans to cut jobs, which will fall across its operations worldwide, which employs 52,000 people.

Close to half the total - some 24,000 people - are based in the UK, with around 820 working at its Inchinnan factory, which produces gas turbines, aerofoils, and engine shafts, as well as engines.

Rolls Royce said the “unprecedented” impact of the contagion meant that it was becoming “increasingly clear that activity in the commercial aerospace market will take several years to return to the levels seen just a few months ago.”

It said the proposed reorganisation will predominantly impact on its civil aerospace business. The Inchinnan plan builds components both for the civil and military sectors.

Negotiations will now begin with trade unions before any figures for job losses in the UK are agreed, but Mr East said the firm was looking to make annual savings of £1.3bn, with job cuts accounting for around £700m of that figure.

The company has furloughed around 4,000 workers under the UK government scheme to pay some of the wages of people affected by the crisis.

Steve Turner, assistant general secretary of the Unite union, said: “The news that Rolls-Royce is preparing to throw thousands of skilled, loyal, world-class workers, their families and communities under the bus during the worst public health crisis since 1918 is shameful opportunism.”

“This company has accepted public money to furlough thousands of workers. Unite and Britain’s taxpayers deserve a more responsible approach to a national emergency. We call upon Rolls-Royce to step back from the brink and work with us on a better way through this crisis.”

The company said it will also cut spending across its plant, property and other areas to strengthen its finances.

Mr East said: “This is not a crisis of our making. But it is the crisis that we face and we must deal with it.

“Our airline customers and air-frame partners are having to adapt and so must we. Being told that there is no longer a job for you is a terrible prospect and it is especially hard when all of us take so much pride in working for Rolls-Royce.

“But we must take difficult decisions to see our business through these unprecedented times.”

The jobs cull will also have an impact on central support functions, as well as the supply chain.

Thousands of jobs are now at risk in companies that supply Rolls-Royce with goods and services.

Rolls Royce said its defence business in the UK and US remains unaffected and has been “robust” throughout the pandemic.

The latest overhaul comes on top of measures announced in June 2018 to axe around 4,600 jobs to save £400m a year.

Rolls Royce warned earlier this month that flying hours for its engines dived by 90 per cent in April as airlines around the world temporarily grounded large proportions of their fleets.

It said at the time that its power systems division has also experienced weaker trading since the first quarter due to extended shutdowns in local markets and ongoing travel bans.

The group had already taken other actions to try to weather the pandemic, slashing its global wage bill by at least 10 per cent, not hiring external candidates, and cutting back on consulting, non-essential travel and sub-contractor costs.

It also scrapped its final shareholder dividend payout to save £137m and cut senior management and board pay by 20 per cent for the rest of 2020.

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