Rolls-Royce is a burning platform, claims new boss
Image source, Getty Images
Tufan Erginbilgic took over running Rolls-Royce in early January
By Michael Race
Business reporter, BBC News
The new boss of Rolls-Royce described the engineering giant as a "burning platform" and said the company's performance is "unsustainable".
Tufan Erginbilgic, a former executive at oil giant BP, told staff that they faced a "last chance" to change.
"Every investment we make, we destroy value," he told employees, according to the Financial Times.
Rolls-Royce told the BBC Mr Erginbilgic had been "honest about our financial underperformance" compared to others.
Rolls-Royce is one of the UK's flagship companies. Its engines and systems are on planes such as the Airbus A350 and Boeing 787.
It was one of many firms hit hard by the Covid pandemic when air travel was grounded for months and it axed 9,000 jobs.
But in a broadcast to staff, Mr Erginbilgic said Rolls-Royce had "not been performing for a long, long time".
The ex-oil executive added that the company was a "burning platform", meaning it is imperative to get out of the situation it finds itself in.
"It has nothing to do with Covid, let's be very clear. Covid created a crisis, but the issue in hand has nothing to do with it," Mr Erginbilgic said. "Given everything I know talking to investors, this is our last chance."
Mr Erginbilgic took over as chief executive of Rolls-Royce from Warren East, who led the firm for eight years, earlier this month.
He is charged with significantly improving the performance of the company, which analysts have said is often less profitable than US rival General Electric in the aircraft sector.
Mr East had said in 2021 that company was "set it on track for growth in the future" and that the worst times were behind, after huge losses of £4bn in 2020. led to thousands of job cuts.
The new boss stressed to staff he was convinced he could improve the company, but warned employees needed to "think differently, act differently, make a difference so this business corrects itself and we don't have much time".
A spokesman for Rolls-Royce said Mr Erginbilgic "laid out his priorities for all of us and stressed the need for everyone within the business to work together in order for Rolls-Royce to succeed".
Some analysts believe Mr Erginbilgic has a tough task ahead.
"The challenge is that there may not be easy solutions," said George Zhao, an analyst at Bernstein.
"Many rounds of restructuring and asset sales were already undertaken under prior chief executive Warren East, putting to question just how much more can be implemented."
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