MPs said to meet with Rolls-Royce boss amid UK job worries

Members of parliament are reportedly set to meet Rolls-Royce boss Warren East to discuss his restructuring plans for the aerospace and defence group following its five profit warnings.

According to the Financial Times, more than 20 Labour and Conservative MPs wrote to East earlier this month to request a meeting, highlighting concerns for the future of the company’s 21,300 employees in the UK and plans to shift more production to low-cost countries.

Rolls-Royce, which generated sales of £14.6bn last year and is the world’s second biggest aero-engine maker, accounts for around 2% of total UK goods exports.

East, who took on the role of chief executive officer in July and earlier this month announced a new senior management structure as the first step in the wide-ranging restructuring, is due to update investors in February on plans to streamline the company’s bureaucratic processes.

He has said that Rolls-Royce will have to cut its unit costs in order to keep competing against bigger rivals such as US-based General Electric and Pratt & Whitney.

MPs are understood to have been particularly concerned by current negotiations to make components for the group’s next combat engine in India.

No deal has yet been disclosed but it is understood that the government in New Delhi is pressing for investment in Indian manufacturing in return for any defence orders.

The FT cited a person familiar with the MPs’ request as saying: “We were told the company brought people from India to be trained in the UK and then go back and do that job in India. That is exactly the kind of thing that concerns us.”

Rolls-Royce said it had received the letters and would be contacting MPs in the new year to arrange a meeting.

“Rolls-Royce remains fully committed to the UK,” a spokesman told the FT. “We actively engage with all our stakeholders, including MPs, to make sure they understand us and can support us when appropriate.”

In November of last year, Rolls-Royce said 2,600 jobs would be cut as part of a restructuring announced by John Rishton, who presided over three profit warnings before stepping down as CEO in July.

In the letter sent to Warren East, MPs said that several requests for meetings with Rishton went unanswered.

Among the signatories on the letter, seen by the Financial Times, are Margaret Beckett, MP for Derby South and a former Labour foreign secretary.