Rolls-Royce piles pressure on smaller suppliers  demanding price cuts

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Rolls-Royce turns the screw on hundreds of smaller suppliers by demanding price cuts of up to 15%

Rolls-Royce is demanding price cuts of up to 15 per cent from hundreds of smaller suppliers as the coronavirus crisis hammers the aerospace industry.

The engineering group has written to some 700 aerospace suppliers asking for the concession, even as it reduces the size of its orders. 

Just days ago Rolls announced it was slashing 9,000 jobs, in response to a global collapse in demand for aircraft.

Pressure: Rolls-Royce has written to some 700 aerospace suppliers asking for the concession, even as it reduces the size of its orders

The ruthless move will pile further pressure on smaller firms which rely on it for a huge chunk of their business. 

Many of them will already be struggling due to the pandemic.

Rolls spends £7billion a year with suppliers but is threatening to withdraw ‘support’ for those who do not offer price reductions of 5 per cent-to-15 per cent, according to the Financial Times.

Other engineers have taken similar decisions, and Rolls said it had no choice but to reduce its costs as demand for new aircraft could halve by 2028.

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