Rolls-Royce’s new CEO has slammed the company for its poor performance. He said that one of their core divisions had been “grossly mutilated”.
Tufan Erginbilgic , took over the leadership of the aerospace and engineering company at the beginning of the year. A few weeks later, he infamously referred to the group as “a burning platform”. The former BP executive, in his latest broadside took aim at its power systems division which produces diesel and gas engine for superyachts and trains, as well as for backup power generation.
Erginbilgic stated that the fact that margins in the division had decreased despite higher revenues was evidence of’mismanagement’, as costs were not kept under control. He said that the business was full of potential, but it needed to “have a clear strategic direction and be managed properly”.
Erginbilgic has launched a Review of Rolls-Royce, which is expected to be completed in the second half. Erginbilgic believes that the power systems division has a long-term role in the company.
Rolls-Royce is divided into three divisions, including civil aerospace (which builds engines for Airbus, Boeing, and business jets); defence (which makes engines and propulsion for the military); and power systems (which produced 26 percent of revenue last year).
Erginbilgic, who joined Rolls in 2007, has hired a number of new executives, including the heads of civil and defence aerospace. The Turkish-British national was credited for turning BP’s fortunes around in two decades as the chief executive of its refining, marketing and sales business.
A spokesperson said: “Tufan was very clear in his communication with investors about the mismanagement of power systems in the past. He has also pointed out that margins will be reduced in 2022, while revenues increase because costs are rising and prices have not kept pace. He has also been very clear about the fact that the situation is being rectified and he anticipates seeing the benefits in the second half this year.
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