by Paula C. Squires
Despite the recent meltdown in financial markets, Rolls-Royce is moving forward with construction of a multimillion aerospace manufacturing facility in Prince George County. “The world today is very different than when we began this project,“ acknowledged Robert Stoddart, executive vice president in charge of Crosspointe Operations, the name given to the 1,000-acre Prince George facility. “There is no change as a result of the worldwide economic crisis. We will be developing the Crosspointe project,“ he assured about 200 business leaders yesterday during an economic conference in Richmond.
Stoddart said Rolls-Royce remains well positioned to grow its business in North America because the British company has no debt. Still, it plans to increase efficiencies and implement belt-tightening measures as a result of economic conditions. A global leader in air power systems, the company works with many suppliers that are assessing the impact of a recessionary economy. “We are working closely with companies to understand the difference in their business forecasts,“ said Stoddart, so Rolls-Royce can adjust its supply chain as needed.
Rolls-Royce is initially investing $100 million to build out 60 acres in Prince George. In the first phase, the facility will manufacture discs and blisks—components used in aerospace engines—and will be used for engine assembly and testing, Stoddart told the gathering. That investment will create about 150 jobs. Overall, Rolls-Royce is prepared to invest as much $500 million over the next 5 to 6 years, he added, which would create more than 500 jobs.
According to Stoddart, grading is complete on the site and construction should begin soon, depending on the weather. The plant is expected to begin operations by the end of next year. Prince George beat out several locales in the U.S. to secure one of two new Rolls-Royce aerospace manufacturing plants that are being built. The other one is in Singapore.
The North American headquarters for Rolls-Royce has been located in Northern Virginia since 1990. That history, said Stoddart, helped the state snare the new project. Economic incentives, an attractive quality of life and an innovative approach to work-force development sealed the deal. Rolls-Royce will be working with the area’s community colleges and the engineering departments of Virginia Tech and the University of Virginia to develop skilled workers for the plant.
The company had revenues last year of nearly $16 billion. It employs 40,000 employees in 50 countries and does $1 billion worth of business with American suppliers. Rolls-Royce wants to continue building its business in the U.S., Stoddart said, where it employs 6,200 people.
Stoddart was one of several speakers at the daylong Virginia Economic Summit held at the Richmond Marriott Hotel and co-sponsored by the Virginia Chamber of Commerce and Virginia Business.
Other executives from the state’s largest companies explained why they chose Virginia and what the state can do to remain competitive as a business location. Greg Cummings, a senior vice president in manufacturing for Philip Morris USA, threw out two challenges: the state should continue streamlining a complex network of work-force development initiatives that spans many state agencies and coordinate with industries on environmental regulation.
“It’s still falling to industries to navigate and coordinate the best approach,” for work-force training, Cummings observed during a lunchtime address. Cummings supports an approach being pushed by Gov. Timothy M. Kaine to make the community colleges a central point of contact. “Until the process is simplified, I wonder if smaller companies will find the help they need …,” he said.
Developing partnerships with schools and work-force training agencies is the approach being used by Northrop Grumman Shipbuilding. Virginia’s largest industrial employer. Mike Petters, president of Northrop Grumman Shipbuilding in Newport News, said his company will need to hire 15,000 workers over the next decade. The aging of the manufacturing work force and the high cost of training—$8,000 in the first-year for a shipyard worker — has made the issue a top priority at his company.
In the three states where the company has shipbuilding facilities, Virginia, Mississippi, and Louisiana, a senior executive is working on the issue, Petters says. Last month, Northrop Grumman started a new program in Pascagoula, Miss., to retain workers. Since Hurricane Katrina, housing and insurance affordability have topped the list of employee concerns there, noted Petters. So the company, in collaboration with a local partner, is offering an employee-assisted housing program where eligible workers can get $7,500 toward a down payment if the employee commits to five years with the shipyard. “So far 72 employees have signed up, and it’s growing every day,” said Petters.