As a consequence of the changes Tony Wood (president of Aerospace) has decided to leave the company and Lawrie Haynes (president of Land and Sea) has decided to retire. Both will remain with the business into 2016 in order to assist with the transition to the new structure.
The current divisional structure of Aerospace and Land and Sea will end, removing a layer of senior management. From 1 January 2016, Rolls-Royce will operate as five market facing businesses, with the presidents of Civil Aerospace, Defence Aerospace, Marine, Nuclear and Power Systems reporting directly to the chief executive.
Rolls-Royce’s civil aerospace business will comprise its merged Civil Large Engines (CLE) and Civil Small and Medium Engines (CSME) businesses. Eric Schulz (currently president of CLE) will become president of Civil Aerospace.
Chris Cholerton will continue as president of Defence, Mikael Makinen will continue as president of Marine, Harry Holt (currently group operations strategy director), has been appointed president of Nuclear with effect from 1 January 2016. Dr Ulrich Dohle will continue as CEO of Rolls-Royce Power Systems. A new chief operating officer will be appointed next year.
Rolls-Royce said the moves would “simplify the organisation, drive operational excellence and reduce cost; ensuring Rolls-Royce is better placed to deliver long-term profitable growth”.
It added: “The new structure will clarify executive accountabilities, intensify leadership focus on operational performance and allow Rolls-Royce to build on its world class engineering capabilities. It is part of a transformation programme designed to make Rolls-Royce a more resilient business and generate incremental gross cost savings of £150-200 million per annum, with benefits accruing from 2017. A further update on the cost and range of the programme will be given in February 2016.”
Warren East, chief executive of Rolls-Royce, said: “The changes we are announcing today are the first important steps in driving operational excellence and returning Rolls-Royce to its long-term trend of profitable growth. This is a company with world-class engineering capability, strong market positions and exceptional long-term prospects.”
Colin Smith will be moving from his role as group director of engineering and technology to be succeeded by Chris Barkey, currently engineering director of CLE. Smith has been appointed group president, with effect from 1 January 2016.
