Rolls-Royce pay fight

Rolls-Royce workers are fighting for pay and conditions in the face of intransigence from the employer. Unite members have overwhelmingly rejected the latest offer from the company, whose financial position is improving.

Rolls-Royce is a key company in Britain’s civil aerospace, defence and energy sectors with a highly skilled workforce. The visit of Keir Starmer and other Labour Party leaders to its Derby site in the first week of the election campaign underlines that importance.

Loss of earnings

The ballot result on the company’s 2024 pay offer was announced in the same week as that visit. The Unite membership voted almost unanimously to reject the offer – over 98 per cent against. A pay rise of 4 per cent and a £500 unconsolidated payment would perpetuate the year-on-year loss of earnings for this highly skilled workforce.

The next stage in this dispute is for trade union representatives – from the Confederation of Shipbuilding & Engineering Unions as well as Unite – to meet company representatives aiming to thrash out a resolution.

Hold out

The risk is that Rolls-Royce will hold out on negotiations and cite lower inflation figures as justification for this offer. Unions hope that a more sensible approach will prevail with an improved offer, given the resounding message of the ballot.

Rolls-Royce plc has continued to improve its trading position and finances, including the reduction of debt amassed during the pandemic from £4.5 billion down to around £1.5 billion. The workforce is seeking reward for the revival.

Profit

For 2023 the underlying operating profit increased by £0.9 billion to £1.6 billion and the operating margin more than doubled to 10.3 per cent. The Board presumably saw paying a higher dividend to shareholders as a greater priority.

‘Rolls-Royce workers cherish its reputation for excellence.’

Workers also want recognition for their contribution to numerous restructuring and transformation initiatives aiming to revise the technical ability of the historic engineering company. “Like a Rolls-Royce” is a synonym for engineering excellence; this proud workforce cherishes that reputation and wants to preserve it.

These initiatives have also been said to be necessary to drag the illustrious historical company into the net zero era. Significant technical expertise has already been applied to fuel efficiency over the past decade. This has produced aircraft engines up to 15 per cent more efficient than previously, enabling continued growth in this mode of transport.

Value created

In a repeat of previous years’ negotiations, the company has used divide and rule tactics. It has agreed deals with sections of the workforce in Britain. The union view is that the whole workforce should share the improved status and value being created.

Workers in the nuclear submarine division, members of GMB, have already been taking action over an inadequate pay offer. After a 90 per cent vote in favour, workers building and maintaining nuclear submarines worked to rule during May. They have not reached settlement with the company.

Tactics

The company appears not to want to avoid industrial action by its workforce in Britain. Their negotiating stance and tactics have driven the workforce to reject the offer and consider industrial action for the second year running.

• Labour’s economic stance announced during Starmer’s visit to Derby has little bearing on this. It declares the top priority is to “deliver economic stability with tough spending rules”. Claims that in power a Labour government would be “pro-growth, pro-business” lack substance and detail.

The Labour Party rightly decries the lack of an industrial strategy, but criticism of the present government’s evident shortcomings and a promise of partnership with business, does not amount to a plan for the future of companies like Rolls-Royce or Britain’s manufacturing base.