Latest news with #Erginbilgiç
Yahoo
3 days ago
- Business
- Yahoo
Rolls-Royce CEO fired managers and held staff brainstorms as part of a ‘4 pillar' turnaround plan that led to 600% share price jump
Just two years ago, Tufan Erginbilgiç, then newly installed as CEO of Rolls-Royce, gave a grim warning to the engine maker's employees, describing the company as a 'burning platform' facing its 'last chance' at survival, as he lamented its track record of destroying value with each of its investments. With that considered, Rolls-Royce's turnaround since—including a 600% share price jump and hitting profit targets two years ahead of schedule—is nothing short of astounding. But Erginbilgiç, a former BP executive who doesn't regard himself as ruthless, took a fairly rudimentary approach to instill a successful turnaround at a group that has added more than $70 billion to its market value in the last two years. Rolls-Royce manufactures engines for major plane manufacturers, Airbus and Boeing, on large, dual-aisle aircraft. The group is also a supplier of engines and propulsion systems for combat aircraft and submarines to government defense departments including the Ministry of Defense in the U.K. Despite that, when Erginbilgiç joined Rolls-Royce, the company was near its floor for market valuation, bogged down by falling air travel during the COVID-19 pandemic and costly contracts with loss-making clients. An industry-wide rebound in travel demand and some astute contract negotiations are among the headline points that explain Rolls-Royce's turnaround. In the background, though, are the fruits of an ambitious plan involving each of Rolls-Royce's 42,000 employees. In an interview with the Financial Times, a victorious Erginbilgiç described how he leaned on 'four pillars' to encourage wholesale change throughout his organization. The first pillar involved showing staff the extent of the difficulties faced by the company, exemplified by Erginbilgiç's 'burning platform' comments, which both shocked and focused his employees. Tougher stances were to follow. Under Erginbilgiç's guidance, the company laid off 2,500 employees in 2023, mostly in middle manager positions, the FT reports. At the same time, Erginbilgiç held workshops for 500 employees to allow brainstorming and the implementation of the best ideas. Erginbilgiç's third pillar required the company to set clear performance targets. The company now has 17 targets, including improving the amount of time its engines were on the wing of a plane, rather than losing money in the repair shop. The fourth pillar of the turnaround aimed to ensure Rolls-Royce's targets were attacked with 'pace and intensity.' 'If you don't have a strategy that can cascade down to 42,000 people it won't get delivered,' Erginbilgiç summarized to the FT. Bosses are increasingly turning to management practices that can help them get their message across directly to as many staffers as possible. In some cases, this is driven by urgency and, in other cases, by technological advancement. Speaking to Fortune last year, Sanofi CEO Paul Hudson described how he used the 'Fight Club' approach to encourage employees to begin using its AI agent. Hudson initially got a small group of people in a room using the tool, before allowing word of mouth to help uptake of the technology spread. Meanwhile, Bayer, a similarly struggling European giant, also turned to a personnel shakeup to combat investor pessimism. Bayer's CEO, Bill Anderson, got rid of more than 5,000 employees, mostly in managerial positions, and asked employees to self-organize and work in 90-day 'sprints' in self-directed teams.A year after Bayer's attack on bureaucracy began, Anderson said attrition at the company had fallen. Editor's note: A version of this article first appeared on on March 25, 2025. This story was originally featured on
Yahoo
5 days ago
- Business
- Yahoo
Rolls-Royce CEO fired managers and held staff brainstorms as part of a ‘4 pillar' turnaround plan that led to 600% share price jump
Just two years ago, Tufan Erginbilgiç, then newly installed as CEO of Rolls-Royce, gave a grim warning to the engine maker's employees, describing the company as a 'burning platform' facing its 'last chance' at survival, as he lamented its track record of destroying value with each of its investments. With that considered, Rolls-Royce's turnaround since—including a 600% share price jump and hitting profit targets two years ahead of schedule—is nothing short of astounding. But Erginbilgiç, a former BP executive who doesn't regard himself as ruthless, took a fairly rudimentary approach to instill a successful turnaround at a group that has added more than $70 billion to its market value in the last two years. Rolls-Royce manufactures engines for major plane manufacturers, Airbus and Boeing, on large, dual-aisle aircraft. The group is also a supplier of engines and propulsion systems for combat aircraft and submarines to government defense departments including the Ministry of Defense in the U.K. Despite that, when Erginbilgiç joined Rolls-Royce, the company was near its floor for market valuation, bogged down by falling air travel during the COVID-19 pandemic and costly contracts with loss-making clients. An industry-wide rebound in travel demand and some astute contract negotiations are among the headline points that explain Rolls-Royce's turnaround. In the background, though, are the fruits of an ambitious plan involving each of Rolls-Royce's 42,000 employees. In an interview with the Financial Times, a victorious Erginbilgiç described how he leaned on 'four pillars' to encourage wholesale change throughout his organization. The first pillar involved showing staff the extent of the difficulties faced by the company, exemplified by Erginbilgiç's 'burning platform' comments, which both shocked and focused his employees. Tougher stances were to follow. Under Erginbilgiç's guidance, the company laid off 2,500 employees in 2023, mostly in middle manager positions, the FT reports. At the same time, Erginbilgiç held workshops for 500 employees to allow brainstorming and the implementation of the best ideas. Erginbilgiç's third pillar required the company to set clear performance targets. The company now has 17 targets, including improving the amount of time its engines were on the wing of a plane, rather than losing money in the repair shop. The fourth pillar of the turnaround aimed to ensure Rolls-Royce's targets were attacked with 'pace and intensity.' 'If you don't have a strategy that can cascade down to 42,000 people it won't get delivered,' Erginbilgiç summarized to the FT. Bosses are increasingly turning to management practices that can help them get their message across directly to as many staffers as possible. In some cases, this is driven by urgency and, in other cases, by technological advancement. Speaking to Fortune last year, Sanofi CEO Paul Hudson described how he used the 'Fight Club' approach to encourage employees to begin using its AI agent. Hudson initially got a small group of people in a room using the tool, before allowing word of mouth to help uptake of the technology spread. Meanwhile, Bayer, a similarly struggling European giant, also turned to a personnel shakeup to combat investor pessimism. Bayer's CEO, Bill Anderson, got rid of more than 5,000 employees, mostly in managerial positions, and asked employees to self-organize and work in 90-day 'sprints' in self-directed teams.A year after Bayer's attack on bureaucracy began, Anderson said attrition at the company had fallen. Editor's note: A version of this article first appeared on on March 25, 2025. This story was originally featured on
Yahoo
26-03-2025
- Business
- Yahoo
Rolls-Royce CEO fired managers and held staff brainstorms as part of a ‘4 pillar' turnaround plan that led to 500% share price jump
Just two years ago, Tufan Erginbilgiç, then newly installed as CEO of Rolls-Royce, gave a grim warning to the engine maker's employees, describing the company as a 'burning platform' facing its 'last chance' at survival, as he lamented its track record of destroying value with each of its investments. With that considered, Rolls-Royce's turnaround since—including a 500% share price jump and hitting profit targets two years ahead of schedule—is nothing short of astounding. But Erginbilgiç, a former BP executive who doesn't regard himself as ruthless, took a fairly rudimentary approach to instill a successful turnaround at a group that has added more than $70 billion to its market value in the last two years. Rolls-Royce manufactures engines for major plane manufacturers, Airbus and Boeing, on large, dual-aisle aircraft. The group is also a supplier of engines and propulsion systems for combat aircraft and submarines to government defense departments including the Ministry of Defense in the U.K. Despite that, when Erginbilgiç joined Rolls-Royce, the company was near its floor for market valuation, bogged down by falling air travel during the COVID-19 pandemic and costly contracts with loss-making clients. An industry-wide rebound in travel demand and some astute contract negotiations are among the headline points that explain Rolls-Royce's turnaround. In the background, though, are the fruits of an ambitious plan involving each of Rolls-Royce's 42,000 employees. In an interview with the Financial Times, a victorious Erginbilgiç described how he leaned on 'four pillars' to encourage wholesale change throughout his organization. The first pillar involved showing staff the extent of the difficulties faced by the company, exemplified by Erginbilgiç's 'burning platform' comments, which both shocked and focused his employees. Tougher stances were to follow. Under Erginbilgiç's guidance, the company laid off 2,500 employees in 2023, mostly in middle manager positions, the FT reports. At the same time, Erginbilgiç held workshops for 500 employees to allow brainstorming and the implementation of the best ideas. Erginbilgiç's third pillar required the company to set clear performance targets. The company now has 17 targets, including improving the amount of time its engines were on the wing of a plane, rather than losing money in the repair shop. The fourth pillar of the turnaround aimed to ensure Rolls-Royce's targets were attacked with 'pace and intensity.' 'If you don't have a strategy that can cascade down to 42,000 people it won't get delivered,' Erginbilgiç summarized to the FT. Bosses are increasingly turning to management practices that can help them get their message across directly to as many staffers as possible. In some cases, this is driven by urgency and, in other cases, by technological advancement. Speaking to Fortune last year, Sanofi CEO Paul Hudson described how he used the 'Fight Club' approach to encourage employees to begin using its AI agent. Hudson initially got a small group of people in a room using the tool, before allowing word of mouth to help uptake of the technology spread. Meanwhile, Bayer, a similarly struggling European giant, also turned to a personnel shakeup to combat investor pessimism. Bayer's CEO, Bill Anderson, got rid of more than 5,000 employees, mostly in managerial positions, and asked employees to self-organize and work in 90-day 'sprints' in self-directed teams.A year after Bayer's attack on bureaucracy began, Anderson said attrition at the company had fallen. This story was originally featured on
Yahoo
26-03-2025
- Business
- Yahoo
Rolls-Royce CEO fired managers and held staff brainstorms as part of a ‘4 pillar' turnaround plan that led to 500% share price jump
Just two years ago, Tufan Erginbilgiç, then newly installed as CEO of Rolls-Royce, gave a grim warning to the engine maker's employees, describing the company as a 'burning platform' facing its 'last chance' at survival, as he lamented its track record of destroying value with each of its investments. With that considered, Rolls-Royce's turnaround since—including a 500% share price jump and hitting profit targets two years ahead of schedule—is nothing short of astounding. But Erginbilgiç, a former BP executive who doesn't regard himself as ruthless, took a fairly rudimentary approach to instill a successful turnaround at a group that has added more than $70 billion to its market value in the last two years. Rolls-Royce manufactures engines for major plane manufacturers, Airbus and Boeing, on large, dual-aisle aircraft. The group is also a supplier of engines and propulsion systems for combat aircraft and submarines to government defense departments including the Ministry of Defense in the U.K. Despite that, when Erginbilgiç joined Rolls-Royce, the company was near its floor for market valuation, bogged down by falling air travel during the COVID-19 pandemic and costly contracts with loss-making clients. An industry-wide rebound in travel demand and some astute contract negotiations are among the headline points that explain Rolls-Royce's turnaround. In the background, though, are the fruits of an ambitious plan involving each of Rolls-Royce's 42,000 employees. In an interview with the Financial Times, a victorious Erginbilgiç described how he leaned on 'four pillars' to encourage wholesale change throughout his organization. The first pillar involved showing staff the extent of the difficulties faced by the company, exemplified by Erginbilgiç's 'burning platform' comments, which both shocked and focused his employees. Tougher stances were to follow. Under Erginbilgiç's guidance, the company laid off 2,500 employees in 2023, mostly in middle manager positions, the FT reports. At the same time, Erginbilgiç held workshops for 500 employees to allow brainstorming and the implementation of the best ideas. Erginbilgiç's third pillar required the company to set clear performance targets. The company now has 17 targets, including improving the amount of time its engines were on the wing of a plane, rather than losing money in the repair shop. The fourth pillar of the turnaround aimed to ensure Rolls-Royce's targets were attacked with 'pace and intensity.' 'If you don't have a strategy that can cascade down to 42,000 people it won't get delivered,' Erginbilgiç summarized to the FT. Bosses are increasingly turning to management practices that can help them get their message across directly to as many staffers as possible. In some cases, this is driven by urgency and, in other cases, by technological advancement. Speaking to Fortune last year, Sanofi CEO Paul Hudson described how he used the 'Fight Club' approach to encourage employees to begin using its AI agent. Hudson initially got a small group of people in a room using the tool, before allowing word of mouth to help uptake of the technology spread. Meanwhile, Bayer, a similarly struggling European giant, also turned to a personnel shakeup to combat investor pessimism. Bayer's CEO, Bill Anderson, got rid of more than 5,000 employees, mostly in managerial positions, and asked employees to self-organize and work in 90-day 'sprints' in self-directed teams.A year after Bayer's attack on bureaucracy began, Anderson said attrition at the company had fallen. This story was originally featured on
Yahoo
16-03-2025
- Business
- Yahoo
£25,000 invested in Rolls-Royce shares 3 years ago is now worth…
£25,000 invested in Rolls-Royce (LSE:RR) shares three years ago would now be worth around £210,000. Hurts to say that because I did have a sizeable Rolls-Royce holding, which was reduce for a house purchase. Nonetheless, I'm thankful for having some exposure to this 738% rally. The remarkable bounce in Rolls-Royce shares stems from a combination of strategic leadership, operational improvements, and favourable market conditions. CEO Tufan Erginbilgiç, who took the helm in 2023, spearheaded a transformative era for the company, focusing on aggressive cost-cutting, efficiency gains, and strategic investments. In 2023, Erginbilgiç launched a comprehensive restructuring programme, streamlining operations and optimising procurement. These efforts paid off in 2024, with Rolls-Royce reporting a 16% revenue increase to £17.8bn and a 57% jump in operating profit to £2.5bn, surpassing expectations. The company also reduced its net debt significantly. Net cash stood at £475m at the end of 2024. This compares to a £2bn net debt position at the end of 2023. The post-pandemic recovery of the aerospace sector played a pivotal role, with large engine flying hours reaching 80-90% of 2019 levels by 2024. Rolls-Royce also secured major defence contracts, including a £9bn deal with the UK Ministry of Defence, further boosting investor confidence. Defence stocks have surged since Donald Trump's return to office. His demands for NATO members to raise defence spending have created a favourable environment for European defence companies, with the Datastream euro area defence index climbing 25% since his inauguration. What's more, in February, Rolls-Royce announced a £1bn share buyback and reinstated dividends, marking its first payouts since the pandemic. These moves, combined with a strong outlook for 2025, have cemented its position as a top-performing FTSE 100 stock. Things are undoubtedly looking up for Rolls-Royce, with business booming across all sectors. The company has seen a remarkable post-pandemic recovery, driven by strong performance in civil aviation, defence, and power systems. In light of the above, its defence revenue is projected to grow at an 11% compound annual growth rate (CAGR) through 2029. Meanwhile, its operating margins are expected to rise from 14.2% to 15.9%. Additionally, Rolls-Royce's small modular reactor (SMR) initiative has generated significant excitement. Developments have positioned the company as a leader in next-generation nuclear technology. However, the stock's forward price-to-earnings (P/E) ratio of 31.9 times suggests it may appear expensive. That's especially compared to the broader market, particularly as it exceeds the FTSE 100 average. But General Electric, a key competitor, trades at a higher forward P/E of 35.8 times. This suggests Rolls-Royce's valuation isn't an outlier in its niche sector. One risk to consider is the company's reliance on civil aviation earnings, which were acutely highlighted during the pandemic. Any future disruptions in the aerospace sector could impact Rolls-Royce's performance, despite its current momentum. Investors should weigh these factors carefully as the stock continues its upward trajectory. Personally, I'm a little hesitant to add to my position at this elevated level. Nonetheless, I think it's an excellent company. I wouldn't be surprised to see more catalysts. The post £25,000 invested in Rolls-Royce shares 3 years ago is now worth… appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool James Fox has positions in Rolls-Royce Plc. The Motley Fool UK has recommended Rolls-Royce Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025 Sign in to access your portfolio
