Parent company is weakening: There is unrest among tank engine manufacturers

Parent company is weakening
Tank engine manufacturers are uneasy

Things are going well for Rolls-Royce Power Systems: the order books are full, and they produce engines for German tanks, among other things. But the British parent company is in the red. A speech by the new boss leads the works council to suspect austerity measures. A spokesman denies this.

At the engine manufacturer Rolls-Royce Power Systems in Friedrichshafen, rumors of imminent austerity measures have caused concern. After a change at the top of the ailing British parent company at the beginning of the year, the works council on Lake Constance fears an investment and hiring freeze. The company also makes the engines for all major German tanks. A spokesman denied the harsh austerity measures.

Years ago, the parent company specialized entirely in engines for wide-bodied aircraft. The group no longer has anything to do with the car brand. The slump in air traffic and the plight of many airlines in the Corona crisis had hit the British even harder than other companies in the industry. The group was already in the red in 2018 and 2019. The engine manufacturer has been managed by Tufan Erginbilgic since the beginning of the year.

In a video speech to the workforce last week, the new Rolls-Royce boss called the group a “burning platform” that is heading towards a possible end without taking any action, said works council chief Thomas Bittelmeyer. With these words, Erginbilgic clearly pointed to an upcoming savings and efficiency course. The past year was record-breaking for the subsidiary, Bittelmeyer said. He warned there should be no budget cuts. “If we can no longer deliver, there will be no more tanks,” he told Der Spiegel.

Spokesman denies hiring freeze

The employee representatives then called for an open-air works meeting, which, according to Bittelmeyer, was attended by more than 4,000 employees. “There is no hiring freeze,” said a company spokesman when asked. They are currently working through the highest order intake in history and are in a solid financial position.

“We remain a reliable partner of the federal government and we will deliver,” emphasized the spokesman. “The fact that we have to become more profitable is one of the first results of the ongoing reviews of the business,” the company spokesman continued. These checks are completely normal processes. “We will continue to hire employees where it serves profitable growth.”

The parent company Rolls-Royce took over the German company in 2014. Under the MTU brand, Power Systems primarily produces and sells large engines for ships and land vehicles. Power plants also make up a large part of the product range. The so-called government business, which includes engines for the Leopard and Puma tanks, accounts for around ten percent of sales. In 2021, Power Systems had a turnover of around 2.75 billion pounds (almost 3.2 billion euros). Current figures should be available on February 23.

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