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Rolls-Royce disclosed the past weekend that the company is planning to halt the operations of its civil aerospace unit. The proposed shutdown is only for two weeks and may happen in the summer.
Why Rolls-Royce suggested a short break
As per Reuters, Rolls-Royce, a British luxury automobile maker, was forced to temporarily stop operation in its jet engine business to cut down on costs. Apparently, the company is also a victim of the COVID-19 pandemic, and it is already feeling its effects.
The company already approached the unions so they can start discussions about the imminent shutdown and cutbacks at its civil aerospace unit. They don’t have a choice but to propose the temporary closedown of the plant since the cash flow has been sluggish in recent months.
“As we continue to manage our cost base in response to the ongoing impact of the COVID-19 pandemic on the whole commercial aviation sector, we are proposing a two-week operational shutdown of Civil Aerospace over the Summer,” Rolls-Royce said in an emailed statement.
As mentioned, Rolls-Royce’s business’ has been affected by the pandemic crisis after its airline customers have grounded a number of planes. Moreover, there were also warnings that the travel industry will further experience a slump since fewer people are traveling these days. But even with the situation, the company is still left with its usual outlays since the business is in operation.
What will the company gain from the shutdown
Bloomberg reported that the move is expected to affect the wages of the 19,000 employees working in Rolls-Royce’s civil aerospace division; this is why the company is in talks with the workers’ union. 12,500 of this workforce is from the U.K., according to the automaker’s spokesman.
On the other hand, it will be saving millions of pounds from less business operation expenses, including energy. This is the primary goal for this plan, so Rolls-Royce is looking forward to easing the financial struggle after the shutdown.
Then again, it is not clear if the company is only closing plants in the U.K. or it will also affect the other plants in various locations. The exact date of the closure is also unknown at this time since it is still in the planning stage.
