Rolls-Royce is intensifying pressure on the UK government to support its ambition to re-enter the narrow-body jet engine market, a sector estimated to be worth £1.6 trillion globally. Chief executive Tufan Erginbilgic stated that without financial backing from ministers, approximately 40,000 jobs could be relocated overseas.
Erginbilgic indicated that discussions with the government regarding financial aid for the project are moving forward, but he emphasized the urgency for a decision. He warned that with Airbus and Boeing, the two primary global aircraft manufacturers, expected to make engine selections for their next generation of narrow-body aircraft within two years, the timeline is critical. "Once they [make] an engine decision, you are either in or you are out," Erginbilgic said at the Farnborough Airshow.
Rolls-Royce is seeking hundreds of millions of pounds in taxpayer support for the program. The company has manufacturing sites in Germany and the United States, where it notes energy costs are lower. Erginbilgic confirmed that these international options exist but expressed a preference for developing the engines in the UK due to the company's origins. "From the country’s perspective, it is a very compelling proposition and we would like to do it in the UK because of our origin. Do we have other options? Yes, but that’s what we would like to do," he stated.
The narrow-body jet engine project is a key focus for Labour's industrial strategy concerning advanced manufacturing. Erginbilgic welcomed the appointment of former Defence Secretary John Healey as Chancellor, stating that Healey "understands Rolls-Royce and our agenda and how much we contribute to the country."
Separately, Erginbilgic issued a broader caution regarding the impact of higher taxes on business investment. He noted that businesses have choices when making significant investments, such as those worth billions of pounds, and require stability in the tax structure. "Sometimes you increase the tax, and then you say this much income will come. Tax doesn’t work that way because businesses have choices," he said.