Latest news with #TufanErginbilgic
Yahoo
a day 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 Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Daily Mail
2 days ago
- Business
- Daily Mail
Rolls-Royce value tops record £75bn: Defence stocks soar as governments are pushed to increase military spending
Rolls-Royce's value has topped £75billion for the first time in its 119-year history as pressure on governments to increase military spending sends defence stocks soaring. As it emerged that Nato plans to force Britain to spend 3.5 per cent of GDP on defence by 2032 – far more than the 3 per cent 'ambition' outlined by Sir Keir Starmer this week – shares across the sector rallied once again. Rolls-Royce, which makes engines for Royal Air Force fighter jets and nuclear reactors that power Royal Navy submarines, closed the day up 2.9 per cent, or 25.4p, at a record high of 894.2p. That gave the engineer a value of £75.7billion. The shares have risen almost ten-fold since 'Turbo' Tufan Erginbilgic took over as chief executive at the start of 2023 when the company was worth just £7.9billion. BAE Systems also hit a record high, rising 2 per cent, or 37.5p, to 1957p, giving it a value of £59billion and taking gains this year to 69 per cent. The company supplies the Ministry of Defence, providing everything from munitions to battlefield communications while also building warships, submarines and planes. Babcock – which was seen as a big winner from plans announced this week to build 12 nuclear-powered attack submarines as it plays a key role in servicing the Royal Navy fleet – gained another 0.9 per cent having risen more than 8 per cent on Monday. The three FTSE 100 defence groups have a combined value of £140billion having been worth just £28.5billion at the start of 2022 before Russia invaded Ukraine. Countries across Europe – including Britain – are racing to rearm in the face of Russian aggression after US President Donald Trump said the Continent must take more responsibly for its own security. In his strategic review of UK military spending announced on Monday, Starmer outlined plans to raise defence spending from 2.3 per cent of GDP to 2.5 per cent by 2027. He also outlined an 'ambition' for it to rise to 3 per cent but refused to set a date. However, Nato members are under pressure to sign up to a much higher target of 5 per cent of GDP in total – made up of 3.5 per cent on defence and 1.5 per cent on wider cyber and security.
Times
04-05-2025
- Business
- Times
Rolls-Royce joins drive away from DEI amid US diversity backlash
Rolls-Royce, the FTSE 100 aerospace and defence giant, has become the latest big company to ditch diversity, equity and inclusion (DEI) policies under pressure from Donald Trump's White House. Staff have been informed that the company, led by Tufan Erginbilgic, is cutting support for its employee 'inclusion networks', set up to back minority groups within the workforce. Employees belonging to groups such as Prism, Rolls-Royce's LGBTQ+ inclusion network, can still meet informally. But the company will no longer provide funding for events. And the groups will not be allowed to have a presence on the Rolls-Royce intranet or put posters up on company premises. • 'Committed to inclusion': BT refuses to shut the door on DEI Several other UK-based companies with US operations have taken
Daily Mail
01-05-2025
- Business
- Daily Mail
Rolls-Royce hails a 'strong start' to the year as it eyes £3bn profits despite tariff trade blow
British engineering giant Rolls-Royce hailed a 'strong start' to the year despite the turmoil triggered by Donald Trump's trade war. At the annual meeting with shareholders in Derby, chief executive Tufan Erginbilgic said 'global tariff increases have created a degree of uncertainty for the industry'. But he said the FTSE 100 engine maker will 'offset' the impact of the levies 'through the mitigating actions we are taking' including tweaks to its supply chain to avoid the most punishing tariffs. Shares rose 1.7 per cent, or 12.8p, to 787p, and are up more than eightfold since Erginbilgic took the helm in 2023 and launched a major turnaround. The trade war between the world's two biggest economies, which has seen President Trump impose taxes of up to 145 per cent on Chinese goods and Beijing hit back with a 125 per cent levy, has shocked the global supply chain. Rolls, which builds engines for Airbus planes and the Boeing 787, has substantial manufacturing facilities in the US, in addition to Derby, its power systems business in Germany, and a facility in China. It said it was on course for profit of between £2.7billion and £2.9billion – despite tariffs and the supply chain challenges. Erginbilgic, whose plan includes cutting 2,500 jobs, said: 'Our transformation is progressing strongly and we continue to expand the earnings and cash potential. 'We are creating a more resilient and agile Rolls-Royce. As a result, we have had a strong start to the year.' Russ Mould, investment director at AJ Bell, said: 'Rolls is one of the most vulnerable UK-listed companies to US tariffs because of its involvement in aircraft parts, a key export to the States. 'Had the tariff tantrum happened five years ago, Rolls might have struggled to cope given the business was weak. 'Having been nursed back to full health, it now stands a much better chance of coping with tariff pressures. 'Investors are taking unchanged guidance to be a massive win. The fact Rolls is sticking with previous earnings and cash flow expectations has prompted another leg-up for the share price.'
RTÉ News
01-05-2025
- Automotive
- RTÉ News
Rolls-Royce confident on targets despite tariff uncertainty
British engineering company Rolls-Royce said today it expected to be able to offset the impact of global tariffs to keep it on track for 2025 profit targets, following a strong start to the year. Britain's preeminent engineering company did not give details of the actions it was taking but the company is in the middle of a transformation plan to improve margins and make the business more resilient and agile. "We expect to offset the impact of announced tariffs on our business through the mitigating actions we are taking," Chief executive Tufan Erginbilgic said in a statement today before the company's annual meeting. Rolls said the trade war between the world's two biggest economies, with President Donald Trump imposing taxes of up to 145% on Chinese goods and Beijing hitting back with a 125% tariff, was causing uncertainty for industry. It added that it was closely monitoring the potential indirect impact on economic growth and inflation. Rolls-Royce, Airbus's exclusive engine partner on its widebody planes and a supplier to Boeing's 787, has substantial manufacturing facilities in the US, in addition to its main base in Derby in England, its power systems business in southern Germany, and a maintenance facility in China.
