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Rolls-Royce is expected to pledge its commitment to UK on 22 March amid fears over the company's manufacturing activity, especially since it has issued many profit warnings. To allay the concerns, the company is likely to create 350 new jobs over the next year at its Derby factory.
Warren East, chief executive at the engineering giant will also meet Midlands MPs and address concerns over the impact of the company's restructuring procedure – which is aimed at improving profits and competitiveness – on their constituencies. "Rolls-Royce is committed to the UK and we have announced well in excess of £400m [€512.59m, $577.93m] of investment in new facilities here in the last couple of years alone, including £30m on the extension of our Trent XWB production facility in Derby," the company said.
An increase in production of the XWB – the company's newest engine for the Airbus A350 wide-body jet – will see the expansion of its 8,000 strong civil aerospace workforce at Derby. However, legislators are expected to seek more commitment from East. They are expecting the company to manufacture Advance and UltraFan next generation engines in the UK, which would guarantee jobs for decades.
In 2014, Rolls-Royce had opened an extra large test bed for civil turbines in Dahlewitz, Germany, which may have instilled fears of the company moving work out of the UK. The equipment is used to test new machinery, especially aircraft engines and costs €90m (£70m), which was partly funded by the Brandenburg government.
Nonetheless, the company had clarified that the opening of a unit in Germany did not mean all the future test beds would be made abroad. It explained that the final decision on where the test beds would be opened depended on which country participated in public funding for the same. One source with knowledge of the situation said, "If we get further support from the UK government we will do it here."
According to Financial Times, a source close to the MPs said, "They want to find out if Rolls-Royce is committed to creating a new test bed [for the new generation of engines] in the UK as opposed to Germany". Apart from legislators, workers unions also seem to have sought a similar commitment from the Derby-headquartered engine maker.
East at his meeting with the MPs is expected to provide clarity on the company's strategy for outsourcing, a concern raised recently by the unions after Rolls-Royce transferred some work from the UK to low-cost countries such as India and Malaysia. He is also expected to address these concerns by saying that the move is to free up capacity of the UK workforce to increase production and for specialised manufacturing of older spare parts.