Sean Jones, The Progress-Index
PRINCE GEORGE - The closing of Rolls-Royce’s manufacturing facility has left a hole in not just Prince George’s economic picture, but also the state, and the entire region.
The British manufacturer announced Aug. 15 that it will close the facility by the end of 2021, eliminating about 280 employees.
Like many businesses large and small, COVID-19 was given as the reason for closure.
Rolls-Royce announced in May that it would be undergoing a major reorganization due to industry-wide losses. The International Air Transport Association projects that the airline industry will face 15% to 30% deficits in 2020. North American airlines had the largest worldwide profit margin in 2019 at 6%.
Along with revenue declines, the IATA expects a slow recover and decreased profit margins when air travel gets somewhat back to normal.
Rolls-Royce responded to this news by eliminating 9,000 positions from its global workforce.
“This is not a crisis of our making. But it is the crisis that we face and we must deal with it,” Rolls-Royce Warren East said in a press release. “Our airline customers and airframe partners are having to adapt and so must we. Being told that there is no longer a job for you is a terrible prospect and it is especially hard when all of us take so much pride in working for Rolls-Royce.”
Rolls-Royce said it expects to save around $1.7 Billion annually.
Layoffs are predominantly affecting the civilian air industry, rather than the military side of the business.
Just two years ago, Rolls-Royce Crosspointe celebrated the production of its 10,000th rotative disc and announced that the state-of-the-art facility would expand to 400 total employees by the end of 2018.
Just two years later, the facility will be phased out by the end of 2021.
“We are disappointed to hear about the Rolls-Royce decision to close the Crosspointe Centre facility in Prince George County, Virginia,” said Deputy County Administrator Jeffrey D. Stoke. “We acknowledge the COVID-19 pandemic has decimated the aerospace industry and Rolls-Royce has reduced workforce at a global level. We will continue to work with Rolls-Royce in assisting the local labor force transition to their next endeavor and plan for an economic future beyond the pandemic.”
Rolls-Royce is the seventh largest employer in Prince George and arguably one of the biggest names among the county’s largest employers - others being Food Lion, Perdue, and Standard Motors, along with military outfits at Fort Lee.
The Crosspointe facility was revolutionary because of its highly-skilled workforce and advanced manufacturing techniques.
When Rolls-Royce built the facility in 2011 it also helped build the Commonwealth Center for Advanced Manufacturing on its 1000-acre campus. CCAM works in partnership with higher education to research and solve complicated manufacturing process problems.
The two facilities are closely linked. The recently departed CCAM President Lorin Sodell initially started at CCAM after serving in an executive role at Crosspoint.
Virginia competed against 7 other states to attract Rolls-Royce to the area. Then-Governor Tim Kaine who called the investment “transformational” for the state of Virginia.
President and CEO for the Virginia Gateway Region Keith Boswell says the loss is huge for the state and the region. VGR is a regional economic development organization encompassing Colonial Heights, Hopewell, Petersburg, Dinwiddie, Prince George, Surrey and Sussex.
“It’s an asset for the Commonwealth of Virginia. Not everybody has a highly advanced manufacturing place like Rolls-Royce,” Boswell said. “We do a lot of great things in Virginia but Rolls-Royce is right up there at the top in manufacturing.”
Though the loss of a large business is a major disappointment, Boswell says the site should be incredibly attractive to any new manufacturing firm. The building is only 10 years old - considered brand new in the world of advanced manufacturing - and it’s ready with water, sewer, zoning and permitting.
“You can’t get much better of a site for being prepared to come on the market,” Boswell said. “This is the kind of stuff that gets us excited if it’s a brand new opportunity, but clearly we don’t want to see Rolls (Royce) leave or shut down.”
He says that VGR is “bullish” about finding a new opportunity for the facility.
“Our Business is to help people expand, or relocate into an area,” he said. “So, when someone is not expanding or relocating, it’s the exact opposite of what our goals are.”
You can reach Sean Jones at email@example.com. Follow him on Twitter: @SeanJones_PI. Follow the Progress-Index on Twitter: @ProgressIndex