Rolls-Royce merges operations, sets up single defense unit

Rolls-Royce announced it is reducing its current five operating businesses to three core units based around civil aerospace, defense and power systems.

This means the naval marine and nuclear submarines operations will be incorporated into the company’s existing defense business, while civil nuclear operations will become part of the power systems business.

“It will allow us to better capitalize on our relationships with defense customers and our market leading widebody position within civil aerospace, while strengthening our technology capabilities across a broad range of power generation applications,” the company said. “We would expect the subsequent restructuring to deliver an additional reduction in costs and assist us in improving performance from our core businesses and the whole group.”

The company added that it doesn’t anticipate job cuts as a result of the restructuring.

“Building on our actions over the past two years, this further simplification of our business means Rolls-Royce will be tightly focused into three operating businesses, enabling us to act with much greater pace in meeting the vital power needs of our customers,” Chief Executive Warren East said. “It will create a Defence operation with greater scale in the market, enabling us to offer our customers a more integrated range of products and services. It will also strengthen our ability to innovate in core technologies and enable us to take advantage of future opportunities in areas such as electrification and digitalisation.”

Rolls-Royce expects these changes to take effect during the first quarter of 2018.

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