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Rolls -Royce - "a burning platform" - new Boss

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Rolls -Royce - "a burning platform" - new Boss

Old 7th Feb 2023, 02:10
  #41 (permalink)  
 
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Before anyone publicly burning down a classic High-Tech company, realize bad results can come from several causes. Be it just a not-viable business in its core, be it unexpected extreme costs to get products out, beyond the technical capabilities of the business, be it product-repairs due to breakdowns before expected EOL or product defect damage payments.

When the core business is not viable, there is little else possible than to close down / sell-out the knowledge.

The other 3 items do look more like what Boeing happened to experience with the 737-MAX: Customers over-asking the companies' capabilities. My bet is the latter happened to RR, customer(s) requesting more, than where (top-) management dares to say "no" to, under shareholders pressure for more profit & shares value. Happens across all industries, more and more, especially when competition is perceived fierce.
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Old 7th Feb 2023, 07:00
  #42 (permalink)  
 
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Lonewolf50

I am not being critical of the US, it has a huge miitary and indeed civil aviation segment. Both i know are not exclusively' buy American' (may the 767 tanker fiasco aside ) I was just making the point that in ultra complex technology/engineering companies scale matters a lot and the Uk doesnt come close . Also GE is part of well GE and Pratt part of Raytheon , there are no uk companies in any industry that come close to these two groupings.

I too wish RR well but they need help from somewhere, and thanks to Brexit its unlikely to be the EU who do support strategic industries or perhaps Airbus Industry altho they might want to maintain competion in the market. . As a side note Rolls Royce Automobile and their sister Bentley Brand are both German owned now

This transtlatic difference is summed up in book written by the daughter of a Boeing test pilot , back in the 707 era . She quotes a story , perhaps to be taken witha pinch of sale about a senior Boeing engineerign exec visiting De haviland in the UK.

He goes to see where the Comet is being bilt . When he returns to Seattle the boss asks how seriosu a competitor is the comet to the still being built 707. Not in the same elague says the engineer, really says the boss I ahd heard it was prety good. It is came the reply but theyare building it in a shed. Meaning DH have no production facilities anywhere clsoe to Boeings and will thus never be able to compete economically. I suspect that despite their renownd High Tech RR struggle in this area because Dritish investors just do not like projects with a high upfront cost loading or large scale
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Old 7th Feb 2023, 16:59
  #43 (permalink)  
 
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Originally Posted by pax britanica
Lonewolf50... I was just making the point that in ultra complex technology/engineering companies scale matters a lot and the UK doesnt come close.
Your point on scale is 100% agreed.
During any reduction in defense spending, when does one know when one has cut a load of fat but has not yet begun to cut muscle and sinew?
Sometimes, when the latter is realized it's a bit late.
"Keeping the defense industrial base warm" is sometimes derided as inefficient - I will argue that RR is a part of the UK's defense industrial base, and if I am wrong will certainly accept correction - but in the mid to long term it saves having to start again from scratch, or, not be able to produce things at all.
(There is an interesting point on that last bit in a thread on Mil Av about tanks, tank parts, and tank ammo, FWIW).
The American auto giant GM, at one point, began shedding brands like Pontiac and Saturn but retained some core brands like Buick, Cadillac, GMC, Chevrolet.
They wanted to cut some fat but keep the muscle, bone and sinews intact.

Back to RR: I remember when P&W was a part of United Technologies. When one of you all mentioned that it was part of Raytheon, I had to go and look that up. Yikes, happened in 2020.

Is RR attractive enough for someone similar to bring them in?
Is that what this current leadership is trying to set the conditions for?
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Old 8th Feb 2023, 15:12
  #44 (permalink)  
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I think the UK Govt would go a long way to keep RR British - they bailed them out over the Tristar engines etc - they're the equivalent of Boeing - too important, too iconic, to be allowed to fall into foreign hands. Which is why their management can get away with making so many poor decisions.
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Old 8th Feb 2023, 15:28
  #45 (permalink)  
 
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The cars were sold already.
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Old 9th Feb 2023, 11:08
  #46 (permalink)  
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The cars weren't very high tech, few jobs and TBH weren't very interesting

R-R proper is a very different matter
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