Rolls-Royce to temporarily close factories, cut benefits, says report

(Reuters) - British aero-engine maker Rolls-Royce Holdings Plc plans to temporarily close factories, reduce working hours and cut benefits as part of new cost-cutting measures, the Financial Times reported on Monday.

The group also faces strike action at one of its oldest plants, at Barnoldswick in Lancashire in the UK, in protest at proposals to shift some production to Singapore, the Financial Times said.

Rolls Royce staff were notified last week by email that the company was looking at new measures in its current cost-cutting drive to cope with the collapse in aircraft demand in the aftermath of the COVID-19 pandemic, the report said, citing a person with knowledge of the matter.

While confirming the email, Civil Aerospace head Chris Cholerton said the company intends to cut management costs by a third, but no new job cuts have been planned beyond the 9,000 announced earlier this year, the report stated.

A Rolls-Royce spokeswoman said in an emailed statement to Reuters that the company plans to update staff in the coming weeks on proposals that are part of the restructuring plan announced in May.

The Financial Times also said that staff at the Barnoldswick plant are planning three weeks of targeted strike action from Nov. 6.

In an attempt to offset the effect of the COVID-19 pandemic, which has stopped planes flying and hammered the company's finances, Rolls-Royce will ask shareholders on Tuesday for 2 billion pounds ($2.6 billion).

Investors are expected to back the rights issue, supporting CEO Warren East's plan to cut 9,000 jobs and close factories.

(Reporting by Vishal Vivek and Aishwarya Nair in Bengaluru; Editing by Susan Fenton)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)