Rolls Royce to close part of Ansty site?

By David Bailey on Jan 22, 13 05:25 PM in

News that Rolls Royce's Ansty plant - or part of it - may shut with the loss of hundreds of jobs comes as a hammer blow for the workers potentially affected. There had been mounting uncertainty surrounding the future of the plant for some time, as had been reported here in the Post.

The plant employs hundreds of highly skilled workers who had been under considerable pressure to adapt to more flexible working patterns, longer hours and temporary lay-offs. Fears over the plant had been mounting as it wasn't clear that Rolls was doing enough to pull in business for the plant.

The plant employs workers repairing both civil and military aircraft, but the latter accounts of some 60% of Ansty's work and therein lies the problem. Steep defence cuts - part of the government's austerity measures - have impacted on the work undertaken at Ansty.

Put simply, beyond 2015 (when Typhoon engine production finishes at Bristol) there doesn't appear to be any new engines being made for Ansty to maintain. Support for legacy engines in planes like the Tornado is meant to continue at Ansty until 2018/9, but this business may well be moved elsewhere (perhaps to Bristol when new engine production ceases).

Overall it's a painful example of how government budget cuts can have a multiplier effect on the economy, in this case affecting not just armed forces workers but also private sector jobs. In fact, some 220 jobs had already been cut last year - around a quarter of the workforce, because of the defence cuts. Some of workers took voluntary redundancy or were redeployed to other RR operations (to be fair to RR, it has a good track record of doing this).

But despite the defence cuts, Rolls reported bumper profis in 2012, with much promise especially on the civil aerospace side of its business. The firm has a £65bn order book.

Put another way, this is a highly profitable business, and one which should have the capacity to shift workers from one line of business to another if conditions change, and to retain skilled workers. If Rolls is cutting the military side of things at Ansty then it should be pressed to give a clear commitment to the civilian operation, and to bringing fresh business to the site.

But this capacity to shift between military and civilian work would be helped if the government had given the defence industry more time to adjust rather than imposing swingeing defence cuts so quickly, such as the cutting of orders, the scrapping of the Ark Royal carrier and the flogging off of the UK's Harrier fleet.

But beyond the defence cuts, Rolls anyway now sees itself as a global firm (despite of course having been rescued by the state back in the 1970s). Indeed, it's no surprise to me that Rolls-Royce has recently invested heavily in Singapore, in part because of very heavy government support there, and is now investing heavily in the US. Both countries do more to support high-tech manufacturing firms, through policies such as enhanced capital allowances, the supply of skilled engineers, R&D tax breaks and so on.

It is a huge disappointment that Rolls-Royce has not committed to keeping open the Ansty plant. And the government could and should have done much more to support R&D and investment in such firms, and to phase in its defence cuts so as to give Rolls and its workers more time to adjust.

Keeping skills in place was key here and a diversification strategy was always needed for the plant if defence business was being run down owing to government spending cuts. Sadly the plant and it workers - or some of them at least - appear to have run out of time.

There's not only the potential loss of current high skill jobs in this situation but the future impact - the firm takes on apprentices and works with local colleges.

A 'task force' response is now needed to save as many jobs as possible at Ansty and to see how workers losing their jobs can be helped to find alternative work - whether within the firm or within other parts of the region's engineering base.

Professor David Bailey works at Coventry University Business School

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