Engineering giant Rolls-Royce has announced a raft of cost-cutting measures to help the firm save £750 million due to the coronavirus crisis.
The firm, which has its civil aerospace and defence divisions in Derby, has this morning revealed a number of moves to help safeguard the business.
In a trading update released to the markets, the company, which last month halted all but essential work at its civil aerospace site in Sinfin, said that it would be reducing the salary of its global workforce by at least 10%.
The salary of its senior managers and executive team will be cut by 20% for the rest of 2020, comprising a 10% reduction and a 10% referral in pay.
Rolls-Royce said it was also reducing discretionary costs, such as non-critical capital expenditure projects, consulting, professional fees and sub-contractor costs, ceasing all non-essential travel and postponing external recruitment.
The firm said that the “headwind” caused by the Covid-19 outbreak so far was approximately £300 million.
Rolls-Royce said that the main impact on the firm had been on engine flying hours in its civil aerospace business.
It said: “Widebody flying hours fell by approximately 25% in the first quarter, compared to the prior year, and fell approximately 50% in March, with an expected further deterioration in April and beyond as airlines have grounded an increasing proportion of their fleets over the last few weeks.
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“Output of new widebody engines remained broadly stable in the first quarter as airframe customers maintained production levels.
“However, our airframe and airline customers are facing unprecedented business challenges and we are in close communication with our customers and suppliers as we prepare for an anticipated reduction in engine delivery and MRO (maintenance, repair and overhaul) volumes.”
Chief executive Warren East said: "We find ourselves in unprecedented times, both as a company and as a key player in vital power markets across the world.
“Our priority is to do everything we can to safeguard the lives and livelihoods of our people and to play our part in helping our customers, partners and communities.
“We are taking significant measures to strengthen the operational and financial resilience of our business.
“I would like to thank all our 52,000 colleagues worldwide for their support, dedication and hard work at this time when difficult decisions are being made ."
In the trading statement, the firm also revealed more details of the role it is playing in the VentilatorChallenge海角视频 Consortium, which is working to increase the 海角视频’s supply of ventilators to the NHS to treat Covid-19 patients.
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In the trading statement, Rolls-Royce said: “Our role in the consortium is to organise a parallel supply chain to feed in materials as quickly as possible to a number of new assembly plants.
“Working with the Manufacturing Technology Centre in the 海角视频, expert medical consultant practitioners and supported by Innovate 海角视频, we have also prototyped, developed and put into operation within just one week, a fast-make intubation shield for use with ventilators.
“Our R2 Data Labs team, meanwhile, has assembled an alliance of leading companies across commerce, banking, travel, technology and research to use data analytics to find new and practical ways to support the global response to the virus.”