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The day Rolls-Royce called in the receiver
The Rolls-Royce crash in 1971 was one of the biggest stories of the decade, casting the whole county into a shadow of fear and uncertainty. YesterdayToday looks back at a troubled time in Derby's history.
However, on the morning of February 4, came the dramatic Evening Telegraph headline, “Rolls-Royce call for receiver”. Rolls-Royce, for so long the pride of Derby, and a business on which so many Derbeians relied for their income, stood on the brink of closure.
Immediately before the announcement, share dealings had been suspended and a 10-point crisis statement was issued. It cited the ever-escalating costs of the RB211 project as the prime reason for the crisis.
The problems had come because Rolls-Royce had agreed to supply 600 engines to aeroplane manufacturer Lockheed at a fixed price.
Development costs, however, had rocketed and, even with the injection of millions of pounds of Government money to shore up the deal, the company expected to make losses in excess of £48m.
Inevitably, panic spread quickly through the town as locals struggled to gather as much information as they could from the various Telegraph editions and from the new local radio station, BBC Radio Derby, which had taken to the air ahead of schedule to bring news of the crisis.
By the Telegraph’s Late Final edition, the receiver, Rupert Nicholson, was promising to “preserve as much as I can of the company”.
He was, however, unable to say just how much that might be “until I have taken an assessment of the situation”.
That was of little comfort to the thousands of Derby families whose livelihoods relied on the stability of the engineering firm.
The following day, Government plans to nationalise the business were said to be “to save, not wind-up, R-R”.
But dramatic speculation in the national media did little to calm fears, with the Daily Mirror reporting that 20,000 workers were about to be made redundant.
According to the Daily Sketch: “Rolls-Royce did not even have enough money in the kitty to meet the weekly payroll demand and would have faced prosecution under the Companies Act if they had continued to trade.”
The Times used its front page as a virtual pictorial obituary to the company, while the Guardian was a little more positive, stating that as many as 67,000 jobs could be saved.
It was not until March that estimated redundancies of around 4,600 were announced. These were mainly made up of workers in the company’s offices.
Some 2,000 would come from the local area, including sites at Derby, Chesterfield and Ilkeston. However, the remaining workforce was warned that, should the RB211 project be cancelled, the total job losses would be much, much higher.
For weeks it seemed as though the very future of the town itself hung in the balance and rumours, both well and ill-founded, continued to spread like wildfire.
There was even speculation that the RAF, which relied heavily on Rolls-Royce for its engines, would become unworkable should the company go into liquidation.
Then came stories that the Derbyshire Building Society had substantial investment in Rolls-Royce and that it, too, was on the verge of collapse.
Scores of investors, determined to withdraw their money before it disappeared, queued outside the society’s branches, bringing much of the town to a standstill.
Although the society reassured savers that the rumours were “malicious and unfounded”, more than £250,000 was withdrawn in one day.
The effects of the Rolls-Royce crash would continue to be felt for several years to come and associated industries, as well as those with local connections, began to take pre-emptive action.
Derby building firm Ford and Weston Ltd, which counted on considerable business from Rolls-Royce, immediately laid off 150 workers from its Rolls-Royce site. The managing director of another company with workers on site at R-R complained: “The place is like a fort; it’s a state of siege and nobody can take anything either in or out. I can’t find anybody to give permission even to remove our stuff from the premises.”
In June, the Evening Telegraph announced on its front page: “Prospects bleak for school leavers in Derby”.
Many major local firms had decided to cut the number of school leavers they would take on. Some 2,500 pupils were expected to leave school the following month and around 1,700 would be looking for work.
Teachers and council officials were preparing to make more sixth-form and college places available to absorb some of the shortfall. Rolls-Royce, of course, which would usually take on some 400 apprentices, was yet to announce how many, if any, it would accept that year.
Aitons, which normally accepted 60 recruits, was expected only to employ 12. A spokesman claimed that the company had over-employed in the past and blamed the school leavers’ difficulties on a lack of liaison between schools, colleges and industry.
The British Railways Technical Centre was also cutting back with no vacancies on the research side and very few on the engineering side.
International Combustion, British Celanese and Stanton and Staveley also admitted they were intending to cut apprentice intakes.
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