RE: Future looks good for RR2 Jan 2023 08:58
Mail article today
The new chief executive of Rolls Royce faces an uphill battle to return the engineering giant to healthy profits and tackle its ‘bloated’ middle management, according to industry sources.
Tufan Erginbilgic, who officially starts his new job today, is expected to lay out his vision for the firm at its full-year results in February – in just 53 days’ time.
The Turkish businessman has been nicknamed ‘Turbo’ Tufan for his track record in revitalising companies and accelerating their performance.
He spent several years running a division of BP that oversees its petrol forecourts – pushing it to record profits.
The aeroplane engine maker is one of three FTSE 100 firms bracing for a change of guard today
It is arguably Erginbilgic who has the toughest task on his hands after a tumultuous period for the beleaguered firm – the most prestigious name in British engineering. Rolls has been in turmoil since 2014.
Next month Erginbilgic is expected to lay out plans for an overhaul of the group – which would be its fourth since 2014.
Although the company is set to break even this year, it is a long way from making bumper profits. ‘Tufan has a strong track record in improving financial performance. Realistically this is what we need to do,’ said a Rolls insider.
Thousands of jobs were cut from blue-collar factory teams during the pandemic. The source said the next wave could focus on middle management and address ‘duplication’ of roles in its three main divisions – defence, power systems and civil aerospace.
‘I would be very surprised if Tufan doesn’t want to have a look at the white-collar workforce,’ the insider said. ‘Warren talked a lot about there being bloated middle management. There is a lot of bureaucracy in the business.’
But independent aerospace analyst Howard Wheeldon said another big turnaround would not ‘go down as well as some people expect’, adding: ‘Investors don’t want another period of change.’
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