Rolls-Royce has made a $150 million ($194.7 million) investment commitment in the UK to aid the doubling of engine production capacity while also investing in its aftermarket services activities in Derby.
In its single biggest investment in the UK for more than a decade, the engine maker will invest in existing and new facilities at the Derby headquarters of its civil aerospace division over the next few years along with financing improvements at manufacturing sites at its headquarters and in nearby Hucknall, Nottinghamshire.
Plans for Derby include the construction of a new facility for the testing of large civil aero engines, which will hold capabilities for testing the Trent XWB, the engine option for the Airbus A350. The engine type, first certified in 2010, has more than 1,600 orders from 45 different global customers.
With around half of its £13.8 billion revenues posted in 2016 emanating from aftermarket services, Rolls-Royce also intends to ramp up its Derby-based MRO facility servicing large engine types.
In a U-turn saving 150 jobs, it now intends to keep its Derby precision machining facility running, after it had been earmarked for closure last year.
Following talks with its unions, which cover 7,000 members, Rolls-Royce has committed to no compulsory redundancies in the East Midlands region for a five-year period.
Eric Schulz, Rolls-Royce, president – civil aerospace, said the investment comes at a time of unprecedented growth for the company. “We are doubling the production of new engines at the same time as introducing three new engines to the market,” he said in a statement released to media on June 29.
“With this investment, we are creating the capacity and flexibility to deliver on our goals, while committing to sustain employment in the UK.”
Company CEO Warren East has overseen a restructuring of Rolls-Royce in the past 18 months following multiple profit warnings which has seen the company hit by its biggest ever pre-tax loss in early 2017 of £4.64 billion for last year.
Rolls-Royce cited a £4.4 billion write-down due to a falling pound in the post-Brexit market and being forced to pay out £671 million in penalties to anti-corruption agencies in the UK, the U.S. and Brazil as the two primary factors behind the heavy loss.