Rolls-Royce engineers focus on cost to offset 'growing pains'

Stronger pound and fall in defence spending causes first dip in profits for a decade

Aero engine maker Rolls-Royce has tasked hundreds of engineers with reducing development, production and maintenance costs as it reported a drop in profits for the first half of 2014.

The company, which is the world's second largest jet engine maker, reported a 20% fall in profits to £644 million – the first reduction in profits it has reported for a decade.

Chief executive of Rolls-Royce, John Rishton, said: “Results for the first six months of 2014 are consistent with our guidance, reflecting the expected reduction in our defence business and weaker trading in marine, as well as adverse foreign exchange.

“The prospects for long-term growth remain outstanding across the Group and in particular in civil large engines where our market share of engines on orders is more than 50%. However, we will experience growing pains. For example, we are investing in new capacity ahead of delivering our order book and restructuring existing facilities to improve efficiency.”

The company said it has 600 engineers working to reduce cost, with 400 focused on original equipment and 200 on aftermarket, where it is improving the reliability of large engines such as the Trent 700 to reduce maintenance costs.

It also pointed to the £100m disc facility at Washington, Tyne and Wear, which it opened in June this year. The 18,000m2 plant, which can manufacture up to 2,500 fan and turbine discs a year for Trent aero engines including the Trent XWB.

The Washington plant uses manufacturing methods developed at the Advanced Manufacturing Research Centre in Rotherham, Yorkshire, including robotics and automation for shot peen, painting and chemical processing operations as well as the latest platforms for machining, grinding, broaching and inspection processes. These reduce disc manufacturing times by 50%, claim the firm.

Fan discs hold around 20 blades at the front of the engine and rotate about 2,700 times per minute to move 1.25 tonnes of air a second. Each disc remains in service for more than 20 years.

Turbine discs hold blades in the hottest part of the engine where the operating conditions are at their most severe and use extremely strong materials made from refined powders machined to highly accurate dimensions. They are coated with a ceramic material to withstand temperatures of up to 1,700 degrees centigrade. The Trent XWB's turbine disc holds 68 blades.