Rolls-Royce, the £120bn aerospace giant, fears that Labour’s leadership turmoil will ground its £3bn bid to build engines for the best-selling short-haul passenger jets made by Boeing and Airbus.
The engineering giant had been close to securing vital development funding for the scheme after intensifying discussions with Sir Keir Starmer’s Government, The Telegraph understands.
I mean, sure, if govt’s stupid enough to give away cheap money then why not? But a £120 b business really should be able to fund £3 b on its own…..
Someone told me the other day that executives at Meta refuse to fly in Boeings. They don’t seem to mind their juniors doing so, though.
On the other hand here’s some bad news for Airbus
https://www.telegraph.co.uk/travel/news/airplane-recalls-might-save-your-life/
I dunno. £120 billion what? Turnover? Profit? Share valuation?
That seems kind of a relevant question.
Anyway, if the government is sucking all the money out of a business via corporation tax, red tape, NI etc, it doesn’t seem unreasonable to ask it to put some of it back.
The £120B is the market capitalisation.
RR’s main/only competitor is GE (USA) – I suspect that the US government ‘helps’ GE. So in order to compete with GE, RR also needs some ‘help’.
US govt buys loads of kit from both GE and P&W for the military so they have a good cashflow. RR not so much. In the civilian market RR sell engine hours rather than the hardware. So they do maintenance, replacement etc and the airlines pay the hourly rate.
The development expenditure is tax-deductible so RR should be able to afford it. The request for a grant means that RR boss wants to reduce the risk that the cost has to be written off if they don’t get the contract.
Someone there still remembers that Wedgewood Benn bankrupted RollsRoyce by telling it to invent a new technology that didn’t work for the Lockheed Tristar
This government-corporation cooperation is fascism.
RR taking the money could be a fatal mistake. Effectively, it gives government a seat on the board.
Since Parliament is all-powerful, it probably wouldn’t make any difference.
The government already has a golden share in RR. Ostensibly because they hold the keys to the engines of the submersible nuclear deterrent of course.
But certainly par for the course with Rolls-Royce, they’d never take the risk on a new engine development without multiple governmental guarantees after the RB211 fiasco. And their current exec Tufan is all about the share price increasing ad infinitum. I jumped ship when he joined but he’s certainly managed that side of things very well.