In addition to the big 2,300 job reduction this year, aircraft engine maker Rolls Royce has recently revealed that it will be cutting more jobs through the remainder of 2008 and up to 2,000 jobs throughout 2009 in the wake of the current economic slowdown.
As the crisis in the global economy deepens, worldwide travel is on a downward spiral and the aviation industry faces a steep upward slope to climb; airplane sales are on the decrease and hence Rolls Royce’s orders from Boeing and Airbus, in turn, are on a steady decline.
This job cut plan, however, will help to reduce costs for Rolls Royce and trim production output in order to manage and manoeuvre through these difficult times, as well as remain competitive and maintain innovation. The idea is to save cash in 2009 due to uncertainties. Cash flow always allows for flexibility and in these times, flexibility can be a luxury.
This job cut plan, however, will help to reduce costs for Rolls Royce and trim production output in order to manage and manoeuvre through these difficult times, as well as remain competitive and maintain innovation. The idea is to save cash in 2009 due to uncertainties. Cash flow always allows for flexibility and in these times, flexibility can be a luxury.
Rolls Royce is not alone and it seems evident that all industries are and will be affected by the present world financial crisis. British giant Aerospace (BAE) Systems is facing the same issues as Rolls Royce is up against as well. The root of the problem just may be a ‘greedy’ Anglo-Saxon model.
It is purely down to Keynesian demand side economics now. But history states that recession has to come and go and that it has a purpose, and that is to readjust inflation and interest rates in order for growth to kick off again. I predict that Rolls Royce’s engines will, once again, fly the friendly skies in style!
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