Rolls Royce Case Study
UK Case Study
Offloading, outsourcing, sub-contracting and social dialogue at the high end of UK manufacturing: a case study of rising order books and restructuring under pressure at Rolls Royce, Sunderland
Steve Jefferys
WLRI, London Metropolitan University
1. Context
Rolls Royce (RR) is a major manufacturer of aircraft engines. In 2010 it employed 38,000 workers in different offices, factories and service centres in 50 countries across the world.
Nearly three-quarters of these are employed in Europe, primarily in the UK where it employs about 23,000 staff (of whom 11,000 are based in Derby), and in Germany (where it employs 3,000 workers). Its share of the world 's market is second only to Boeing, making it a 'first tier ' provider of major components for civilian and military aircraft. It supplies and services over 600 airlines, 4,000 corporate and utility and helicopter operators and
160 armed forces. Like most other 'first tier ' manufacturers it is not only a direct manufacturer of engines for the 'final ' customer, like the Airbus 787, but it also supplies components for some of the engines made by its direct competitors, such as Boeing.
RR was created by the two men who used their engineering skills (Royce) and sales expertise (Rolls) to establish a successful high quality car maker in 1906. In 1914 Royce designed his first aircraft engine, and in 1940 the advent of the Second World War saw the company become a leading a supplier of engines for the Hurricanes and Spitfires. By the end of the war RR was making gas turbine engines and it took these into the emerging civil aviation market in 1953. In 1966 it merged with the other major British car and aero engine manufacturer, Bristol Siddeley, but initial problems with the new three turbofan
RB211 engine led the firm to the brink of collapse and to avoid this and another upsurge of social unrest, it was nationalised by the Conservative government in 1971. Two years later the top of the range car maker
Offloading, outsourcing, sub-contracting and social dialogue at the high end of UK manufacturing: a case study of rising order books and restructuring under pressure at Rolls Royce, Sunderland
Steve Jefferys
WLRI, London Metropolitan University
1. Context
Rolls Royce (RR) is a major manufacturer of aircraft engines. In 2010 it employed 38,000 workers in different offices, factories and service centres in 50 countries across the world.
Nearly three-quarters of these are employed in Europe, primarily in the UK where it employs about 23,000 staff (of whom 11,000 are based in Derby), and in Germany (where it employs 3,000 workers). Its share of the world 's market is second only to Boeing, making it a 'first tier ' provider of major components for civilian and military aircraft. It supplies and services over 600 airlines, 4,000 corporate and utility and helicopter operators and
160 armed forces. Like most other 'first tier ' manufacturers it is not only a direct manufacturer of engines for the 'final ' customer, like the Airbus 787, but it also supplies components for some of the engines made by its direct competitors, such as Boeing.
RR was created by the two men who used their engineering skills (Royce) and sales expertise (Rolls) to establish a successful high quality car maker in 1906. In 1914 Royce designed his first aircraft engine, and in 1940 the advent of the Second World War saw the company become a leading a supplier of engines for the Hurricanes and Spitfires. By the end of the war RR was making gas turbine engines and it took these into the emerging civil aviation market in 1953. In 1966 it merged with the other major British car and aero engine manufacturer, Bristol Siddeley, but initial problems with the new three turbofan
RB211 engine led the firm to the brink of collapse and to avoid this and another upsurge of social unrest, it was nationalised by the Conservative government in 1971. Two years later the top of the range car maker
References: Bitc (2011), Corporate Social Responsibility Index, Results and Ranking 2011, Business in the Community, http://www.bitc.org.uk/cr_index/results_and_ranking/index.html Ridgway, K. et al, (2008), Modelling the Evolution of the Aerospace Supply Chain, Final ESRC End of Award Report, RES-000-23-0845, Swindon: ESRC. Rolls Royce (2007), Annual report and accounts 2006, Rolls Royce plc. Unite the Union (2011a), Aerospace Industrial Sector Fact Sheet, Unite, February. Unite the Union (2011b), Minutes and Record of the Executive Council, 24, 25 and 26 January, Unite, January. 13