Tufan Erginbilgic has only been the official CEO of the British engine and industrial group Rolls-Royce since the beginning of January.

Now he has given a speech to the workforce, which, with brutal openness, hit like a medium-sized bomb and prepared a new course for savings and efficiency.

"With every investment we make, we destroy value," said Erginbilgic in his video speech at the company's headquarters in Derby, which was also broadcast to the employees of the German locations.

He called Rolls-Royce "a burning platform".

The British group performs poorly against all key competitors and has lower profit margins.

Erginbilgic named the US corporations General Electrics, Raytheon and Caterpillar.

Like the Rolls-Royce subsidiary MTU Friedrichshafen, the latter also produces diesel engines.

Philip Pickert

Business correspondent based in London.

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Rolls-Royce has not only been doing badly since the Corona slump, which forced civil aviation to the ground and caused high sales losses for the engine area.

In the past five years, the company's share price has fallen 63 percent.

The pandemic halved the value, but even before that it was clearly downhill.

The market value of Rolls-Royce is currently just over 9 billion pounds (10.3 billion euros).

Erginbilgic announced a "transformation program" to increase efficiency and "optimize".

He described this as "our last chance".

However, he did not give any details in his free speech.

Responses from staff varied between concern and support.

"He spoke with passion and reached people's hearts," said a senior Rolls-Royce manager in Derby to the FAZ "Erginbilgic is a man with a plan." The new CEO, who previously worked for the energy company BP for a long time, have been talking to Rolls-Royce employees for months, studying figures and conferring with investors.

However, the employees now fear a new round of layoffs.

"Rolls-Royce has been abused and has already gone through x restructurings," said a manager of the FAZ. "The mood is: haven't we already saved enough?"

The Derby plant had to starve

During the Corona crisis, CEO Warren East, Erginbilgic's predecessor, cut around 9,000 jobs to reduce costs by £1.3 billion a year.

The group now has around 43,000 employees.

In Germany there are still around 10,000 employees, almost 6,000 of them in Friedrichshafen on Lake Constance, where MTU (Rolls-Royce Power Systems) is based, around 2,300 in Dahlewitz near Berlin, where Rolls-Royce builds engines for private jets, and 800 in the smaller Oberursel plant near Frankfurt.

At the Friedrichshafen site in particular, where engines for the Leopard 1 and 2, Puma and Marder tanks are built, among other things, there is concern among the workforce about the future course.

Most of the job cuts over the past two years took place at the Derby plant in England.

The London business newspaper "Financial Times" now said that the upcoming job cuts would primarily affect office workers in the administration of civil aviation.

"Erginbilgic did not make this statement," said an eyewitness to the FAZ. It was generally vague what the CEO was planning.

He has deliberately not yet fleshed out his ideas.

But there are worried expectations among employees, said a Rolls-Royce manager.

A tough reputation precedes the 62-year-old new CEO with British and Turkish citizenship.

"Now comes Tufan, the tough dog," is what Rolls-Royce employees say.

Erginbilgic was not allowed to give specific figures on the latest developments in the 2022 financial year in his speech.

The annual report will only be presented in four weeks, on February 23, until then it has to remain silent.

In November, CEO East was optimistic.

He had highlighted a recovery in the aircraft engine business and record orders for power systems.

Engine hours flown have recovered to 65 percent of pre-corona levels.

Rolls-Royce sales will grow in the low to mid-single digits.

In the past three months, the share price has recovered as China's opening up after the coronavirus lockdown has helped the airline industry.

On Friday, after Erginbilgic's speech became known, the price temporarily fell by more than 4 percent.