Rolls-Royce share price: joint venture with Liebherr announced
Rolls-Royce Holding Plc (LON:RR) announced today that it has agreed to establish a 50:50 joint venture with Germany’s Liebherr-Aerospace to develop production capabilities and capacity for the power gearbox for Rolls-Royce’s new UltraFan jet engine.
The joint venture will be based in Friedrichshafen, Germany, and manufacturing will initially be done in existing Liebherr facilities. As production volumes increase, however, separate standalone facility may be built to increase capacity.
Meanwhile, Rolls-Royce’s German unit has already started building a new €80 million power gearbox test centre at its Dahlewitz site south of Berlin, which is expected to be operational by late 2016.
“The UltraFan engine design includes a suite of new technologies to power next-generation aircraft,” Rolls-Royce aerospace president Tony Wood commented. “The power gearbox is an integral part of this new design, and we are delighted to be partnering with Liebherr on this highly efficient future power gearbox technology.”
Rolls’ share price had climbed 0.78 percent to 969.50p as of 13:39 BST today, outperforming the FTSE 100 which had gained about 0.4 percent. The company’s stock has appreciated more than 11 percent year-to-date, but is some 10 percent lower on an annual basis.
The UltraFan technology is expected to offer at least 25 percent improvement in fuel consumption when compared with the company’s first generation Trent engines, and is projected to enter service by 2025.
The British manufacturing giant is in the midst of a significant cost-cutting programme, which will see as many as 2,600 job losses , primarily in its aerospace division, over the next twelve months.
Rolls’ plans have come under fire from labour unions, who argue that the company has no moral basis to cut so many jobs given the record-breaking $9.2 billion Emirates order, which was booked by the company earlier this year.
As of 14:36 BST, Wednesday, 10 June, Rolls-Royce Holding PLC share price is 969.75p.