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Rolls-Royce has come under fire from politicians and a leading trade union for offshoring engineering jobs to India after it revealed plans to open an aerospace design centre in Bangalore.
Employees at Rolls-Royce in Derby learned last month of the plans, which will see 500 “CAD specialists” recruited in Bangalore to handle both domestic and international projects, said the Unite union.
The news comes after Rolls-Royce’s UK workforce were told last November that 2,600 jobs had to be axed in its aerospace division over an 18-month period as part of a global restructuring exercise. The cuts have so far led to the proposed closure of Derby’s precision manufacturing facility, with the loss of 300 jobs, and a turbine blade machining plant in Ansty, Warwickshire, with the loss of 140 jobs. The company also plans to cut more than 200 jobs at factories in Inchinnan, Renfrewshire, and East Kilbride.
Tony Tinley, Unite regional officer, told PE: “The company’s order book has increased, but the company has told us they are not willing to increase capacity but send work to low-wage economies instead.”
Tinley added: “The government is trying to build up the economy on the back of manufacturing – high wage, high value, high skill – and is giving Rolls-Royce loads of money each year for research and development, but it’s outsourcing work abroad. At what point does the government intervene?
“We don’t want the government to stop giving Rolls-Royce money, we just want discussions to be more professional, so when they get the money it’s on the understanding that the jobs will be in the UK.”
Rolls-Royce is reportedly looking to build two testbeds in the UK in the near future, which Tinley believes will provide a strong test of the new government. “Historically engines have been tested and built in the UK, but the last testbed was built in Germany, and we have already seen some work go to Germany as a consequence,” he said.
Rolls-Royce told PE it is increasing capacity in India to better position itself for new business opportunities and to be closer to customers in the region. It already operates two engineering centres in Bangalore along with Indian companies Quest and Tata Consultancy Services. The centres were established in 2005
and 2010.
The company said: “We are looking to build up our capability in Bangalore over the next three years and anticipate that we will employ about 500 engineers there by the end of 2017. The work done there will include work for customers in the region, and the development of new tools and technologies that make the best use of the capabilities in India.
“More than half of the work that we anticipate being done in India is currently provided by outsourced providers and agency contractors.”
The issue of offshoring jobs was raised by Chris Williamson, MP for Derby North, in the House of Commons at the end of March. Business secretary Vince Cable responded by saying: “There is indeed some offshoring taking place, but there is also a great deal of onshoring, by Rolls-Royce and other engineering companies elsewhere.
“Indeed, engineering that used to be carried out in India is now being carried out in the UK.”
The issue was also raised at the European Commission in January by Glenis Willmott, Labour MEP for the East Midlands.
She called on the company to reconsider the “short-term redundancies” and invest in the UK.