The engineering behemoth was referred to as a “burning platform“, and its performance was deemed “unsustainable” by Rolls-Royce’s new CEO.
Former BP executive Tufan Erginbilgic advised staff that they had one final opportunity to make a change.
According to the Financial Times, he reportedly told employees that “every investment we make, we destroy value.”
Mr Erginbilgic had been “honest about our financial underperformance,” according to Rolls-Royce, the company told the BBC.
One of the huge companies in the UK is Rolls-Royce. Planes like the Airbus A350 and the Boeing 787 have their systems and engines built in.
When flights were grounded for months due to the COVID pandemic, this company was one of many that suffered greatly. It also laid off 9,000 workers.
However, Mr Erginbilgic stated that Rolls-Royce had “not been performing for a long, long time” in a broadcast to employees.
The company is a “burning platform,” the former oil executive continued, emphasizing the urgency of finding a solution to its predicament.
“Just to be clear, it has nothing to do with Covid. Covid started the crisis, but it has nothing to do with the current problem, “said Mr Erginbilgic. This is our last chance, based on everything I’ve learned from talking to investors.
Earlier this month, Mr Erginbilgic succeeded Warren East, who had served as the company’s CEO for eight years.
He is tasked with significantly enhancing the company’s performance, which according to analysts, is frequently less profitable than US competitor General Electric in the aircraft industry.
After massive losses of £4 billion in 2020, Mr East claimed that the company had “put it on track for growth in the future” and that the worst times were behind them in 2021.
Caused thousands of job losses.
The new manager emphasized to staff that he was confident he could improve the business but warned that time was of the essence and that employees needed to “think differently, act differently, and make a difference so this business corrects itself.”
Mr Erginbilgic “laid out his priorities for all of us” and “emphasized the need for everyone within the company to work together in order for Rolls-Royce to succeed,” according to a spokesman for Rolls-Royce.
According to some analysts, Mr Erginbilgic faces a difficult task.
The challenge, according to George Zhao, an analyst at Bernstein, is that there might not be simple answers.
Many rounds of asset sales and restructuring were already carried out under the previous chief executive Warren East, raising the question of how much more can be done.