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Rolls-Royce sacks two top managers Rolls-Royce sacks two top managers
(about 5 hours later)
Rolls-Royce will revamp its management structure and recruit a chief operating officer as Warren East strives to revive the ailing company.Rolls-Royce will revamp its management structure and recruit a chief operating officer as Warren East strives to revive the ailing company.
Tony Wood, the head of aerospace, will depart, and Lawrie Haynes, who runs the land and sea division, will step down next year.Tony Wood, the head of aerospace, will depart, and Lawrie Haynes, who runs the land and sea division, will step down next year.
The changes, reported by the Financial Times, are expected to be announced on Wednesday. The change in structure is part of a plan to save up to £200m a year from 2017, it said.
Removing the top layer of management is a bid to simplify decision-making.Removing the top layer of management is a bid to simplify decision-making.
Rolls-Royce has issued a series of profit warnings that have battered its share price, leaving it down 38% this year.Rolls-Royce has issued a series of profit warnings that have battered its share price, leaving it down 38% this year.
Mr East, who joined in July, admitted last month that the engineering group had developed an "accounting fog" that had left investors unclear about its direction.Mr East, who joined in July, admitted last month that the engineering group had developed an "accounting fog" that had left investors unclear about its direction.
He wanted to make Rolls-Royce a "simpler" and more responsive business and cut its 27 management structures that dealt with different types of technology to just eight. He wants to "simplify" Rolls-Royce to make it a more responsive business.
"We are going to rewrite the operating system for the company," Mr East told the FT. From January, the company will operate as five businesses, with the presidents of civil aerospace, defence aerospace, marine, nuclear and power systems reporting to Mr East.
"I am sure there will be some further structural changes but we need to start somewhere. The best place to start is the executive team that will help me drive these changes through the business." Currently, the firm has two divisions: aerospace, and land and sea.
"The changes we are announcing today are the first important steps in driving operational excellence and returning Rolls-Royce to its long-term trend of profitable growth," said Mr East.
Rolls-Royce employs more than 21,000 people in the UK, with more than 12,000 employed at its Derby aerospace engines and submarines division.Rolls-Royce employs more than 21,000 people in the UK, with more than 12,000 employed at its Derby aerospace engines and submarines division.
Earlier this year, the company announced 3,600 job cuts and warned that some of its 2,000 senior managers would depart.Earlier this year, the company announced 3,600 job cuts and warned that some of its 2,000 senior managers would depart.
The crisis claimed the scalp of John Rishton, whom Rolls-Royce said in April would step down after four years as chief executive. The crisis claimed the scalp of John Rishton, who Rolls-Royce said in April would step down after four years as chief executive.
The company makes engines for the UK nuclear submarine fleet. It was reported this week that the government had drawn up contingency plans should Rolls-Royce's problems become so acute that it faced being broken up. The company makes engines for the UK nuclear submarine fleet. It was reported this week that the government had drawn up contingency plans, should Rolls-Royce's problems become so acute that it faced being broken up.
The FT report suggested that could even mean taking Rolls-Royce's nuclear business into public ownership.
Business minister Anna Soubry told the House of Commons that the government was "monitoring the situation carefully" but did not elaborate.Business minister Anna Soubry told the House of Commons that the government was "monitoring the situation carefully" but did not elaborate.
The next generation of nuclear submarines, due to be deployed by 2030, is being planned by the government.The next generation of nuclear submarines, due to be deployed by 2030, is being planned by the government.