Rolls-Royce plans thousands of job cuts as engine problem spreads

Published: June 11, 2018 15:04:09 | Updated: June 14, 2018 14:49:54

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Britain’s Rolls-Royce said a costly compressor problem that had grounded Boeing planes had now been found in a different type of engine, compounding pressures on a group that is due to cut more than 4,000 jobs this week.

Britain’s best known engineering company has been hit by a problem with a compressor in the Trent 1000 package C engine that is not lasting as long as expected, grounding planes, forcing inspections and angering airline clients.

The engine powers Boeing’s 787 Dreamliner jet, reports Reuters.

On Monday it said it had now found the same issue on a “small number of high life Package B engines”, requiring a one-off inspection of the B fleet and sending its shares down 1 per cent.

The news, which will not affect Rolls’ full-year free cash flow target, comes as the group embarks on the latest stage of a major restructuring program under Chief Executive Warren East that is designed to boost profitability.

On Friday the group will host a capital markets day where, according to a person familiar with the situation, it will announce more than 4,000 job cuts, mostly in Britain and affecting support and management roles.

The group, which employs 50,000 people in 50 countries, is also expected to set out how it will make a return on the investment made in recent years and the expected drivers of cash flow beyond its medium-term horizon.

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