Rolls Royce Announcement

[idpickering]

· Simpler, leaner and more agile organisation

· Driving continuous improvement across all parts of our business

· Delivering improved returns; run-rate net cost savings of £400m p.a. by end of 2020

· Transforming our business to support our world-leading technologies

https://www.investegate.co.uk/rolls-roy ... 00033377R/

[idpickering]

RR. put this out today;

ROLLS-ROYCE OUTLINES MID-TERM AMBITION

· Details on restructuring plan; run-rate net cost savings of £400m p.a. by end of 2020

· Well-placed to now exceed free cash flow of £1bn by 2020; mid-term ambition for free cash flow per share to exceed £1

· Mid-term ambition for through-cycle cash flow return on invested capital of 15%

· Update on Trent 1000 cash costs for 2018 - Group free cash flow guidance maintained

https://www.investegate.co.uk/rolls-roy ... 00034819R/

[idpickering]

Quite obviously, I guess, this has gone down well as RR. are up 13%!. Any HYP holders out there?

Ian.

[teecee90]

Quite obviously, I guess, this has gone down well as RR. are up 13%!. Any HYP holders out there?

Ian.

No, but my son is due to start work for them is September so hopefully he wont be affected...

[BristolDave]

Yes I hold Rolls Royce although they are not a Hype share

[BristolDave]

Freudian slip that was of course HYP

[idpickering]

Yes I hold Rolls Royce although they are not a Hype share

Thanks for that. I must admit that I thought RR. was held by some HYPers. Evidently not, so I've asked that this thread be deleted, as it's off topic here.

Ian.

[PeterGray]

If I understand what I heard correctly, RR are planning to get rid of 25% of staff - none (or very few) of whom will be front line production.

We can also be pretty sure they will not be board level, or senior mgmt. So that leaves mid managers, finance dept, research and development. Do they really have that many to spare?

If that's really true I'd run a mile. Are they really confident they can do that and still keep good financial control, manage production and develop new products. It sounds like a hell of an ask to me, and a likely recipe for shrinkage and disaster down the line.

Peter

[gbjbaanb]

I can believe they can remove layers of management and deliver good productivity. Many companies have stuffed themselves with more and more useless managers (think of all those "diversity officers" and "equality champions" that seem to be all the rage, nobody will miss them).

If the drive it towards more self-organising teams, then I think that will work well. RR has some awesomely clever and practical front line staff, suddenly freeing them from the tedium of management will allow them to do what they do without interference. Its quite possible this is a "buy as much as you can" moment.

As Warren East said: “We have too complex a management and support organisation and we need to simplify that so that we can remain competitive."

so it seems they have built an org around sales and account management, and not enough around engineering. They are cutting their 5 divisions into 3, dropping marine and nuclear, so there's scope for a heap of redundant positions to go with that 2/5s. It also sounds like, along with overlapping management in those divisions, there was a overly large central management function. So loads of managers in divisions arguing the toss with each other over who's responsibility or credit each gets!

I've worked in big companies like that - one sold my work, that cost the company £300 a day, to customers at £6k a day and failed to make any profit on that because there were 5 layers of management and support between me and the customer who all had to have a piece of the pie. So I can easily believe that they can reduce the headcount and make the business work much better.

https://www.derbytelegraph.co.uk/news/b ... es-1674419