NewsPublic Affairs / December 18, 2013

Could Cuts Be Coming to Rolls Royce In Indy?

Sam Klemet
Could Cuts Be Coming to Rolls Royce In Indy?

Rolls Royce President and CEO Jim Guyette delivered the keynote speech during today’s Economic Club of Indiana Luncheon.

Rolls Royce’s offices in Indianapolis employ more than 4,000 people, including 1,500 engineers.

Guyette says they are working on projects that have a global reach.

"Over half of our North American employers are here," he said.  "When you look at the products that we produce, these are highly engineered projects, high valued manufactured products.  You will find them all over the world in armies and navies and airlines and on ships.  These are projects that matter."

But, he says as defense budgets are reduced, that means less business for companies such as Rolls Royce and believes decisions will be made in the coming weeks on whether that will mean cuts locally.

"There are consequences to that. There have to be consequences to continually reducing the budget," he said.  "That translates to less demand and for us globally, our defense business in 2014 is going to be less than what it was in 2013.  So, that means less work in factories.  That means less engines, less spare engines, less parts, less components and that ripples down into our supply chains."

"It's not just pull backs that effect us, it's the top line budget and how money is going to be spent.  Throughout the western world defense budgets are reducing, there is just no question about that."

During his speech Guyette called for greater investment in education including by the private sector. He says without doing so, the country will not be able to close the skills gap.

"It is a very, very competitive world.   If we do not have a robust education system, we are going to fall behind," he said.