Rolls-Royce will consider selling its lossmaking commercial marine business as chief Warren East launches a new round of cost-cutting in a bid to accelerate his of cost-cutting in a bid to accelerate his shake-up of the blue-chip engineering business. Mr East is said to be looking at the strategic options for the marine business as part of a wider restructuring plan that includes consolidating Rolls-Royce’s five business units down to three. Mr East said there was a need to “reinforce behavioural change with further measures to streamline processes”, which are expected to focus on management and support functions.
Mr East said the review of its civil marine unit and the streamlining of its business units into civil aerospace, defence and power systems would “form our core businesses”. Although a sale of the commercial marine business is likely, Rolls-Royce will keep its naval marine business, which along with its nuclear submarine propulsion business, would form part of an enlarged defence unit.
The civil nuclear operation — currently a contender in the government competition to build small modular reactors — would come under the group’s power systems business.
A decision to exit commercial marine would please investors, who as a result of the business suffering badly from the downturn in oil and gas exploration, have urged the group to offload the business which supplies the offshore oil and merchant ship market.
Mr East has repeatedly voiced his support for the diversified portfolio built up by his predecessors. He has postponed a decision on a possible disposal of marine while the business — based in Norway and Finland — was being restructured. Close to 2,000 jobs have been cut in the marine business in the past three years, with the number of factories reduced to 15, down from 27.