Rolls-Royce may slash 400 jobs at Derby plant

ROLLS-ROYCE, the engineering company, was yesterday forced to admit that it is considering axing up to 400 workers at its Derby plant to cope with a projected downturn in large-aircraft engine orders.

Union leaders condemned the move, which could affect one in 10 workers in the company's UK airline division. Worldwide, Rolls-Royce has about 40,000 people on its payroll.

A Rolls-Royce spokesman said: "The 10 per cent number was one used in internal discussions [with union representatives]. It's not an unreasonable number to use ... There are huge pressures across the sector world-wide."

The Rolls-Royce admission follows hard on the heels of two mass layoffs earlier this week: British American Tobacco cut 550 jobs across the country and RJB Mining shut down a deep-level coal mine in Northumberland, with the loss of 429 jobs.

"The announcement could have been handled better," Sir Ken Jackson, general secretary of the Amalgamated Engineering and Electrical Union, said: "These are skilled jobs; it's disappointing to lose them at such a prestigious company. Clearly manufacturing is not out of the woods and [Thursday's] rate rise will not have helped."

Roll-Royce launched a damage limitation exercise after documents detailing union talks with management were featured in a regional newspaper report. "We are not widening [the proposed cutbacks] in plc terms. It just affects the airline business. We are looking to reach a budgetary target - if we can use other means [than layoffs] to do that, we would look at that," the Roll-Royce spokesman said.

The Derby plant makes engines for commercial aircraft built by Boeing and Airbus Industrie. The company foresees a decline in engine orders for larger aircraft even as demand for corporate and regional jet engines picks up.

Rolls-Royce said its principal competitors, Pratt & Witney and General Electric, had also announced rationalisations in recent weeks.

The company said it hoped that the losses could be achieved through voluntary redundancies or retirement, and unions said that they would be pushing hard to avoid compulsory layoffs.

Rolls-Royce shares ended 0.75p stronger yesterday at 218.75p.