Rolls-Royce and Goodrich announce engine controls joint venture

The world's second largest aircraft engine manufacturer Rolls-Royce today said it had signed an agreement with Aerospace and defence contractor Goodrich Corporation to form Rolls-Royce Goodrich Engine Control Systems Limited, trading as Aero Engine Controls.

The deal would enable Rolls-Royce to rationalise its engine-controls system solution, while enabling the US-based Goodrich to strengthen its presence in Europe. Rolls-Royce had announced the proposed formation of the engine controls joint venture on 14 August 2008.

Aero Engine Controls will develop and supply engine controls for Rolls-Royce engines. The transaction is expected to be complete within two weeks.

The two companies will hold a 50 per cent stake in Aero Engine Controls, which  will combine Goodrich's existing UK-based engine controls design and manufacturing business with Rolls-Royce's 'full authority digital engine control' (FADEC) engineering expertise. Goodrich will retain the aftermarket products and services business associated with the joint venture's products.

In establishing the joint venture both parties will have transferred approximately £14m of assets and cash into Aero Engine Controls. In addition Rolls-Royce will make a cash payment of $100 million to Goodrich Corporation and will assume certain foreign exchange contracts with an estimated cost to Rolls-Royce of £20 million.

Assets being transferred from Rolls-Royce to the joint venture are expected to have minimal impact on Rolls-Royce Group profitability estimates.

Aero Engine Controls will have around 1,330 employees, comprising staff who will transfer from the two companies, and has sites in Derby, Birmingham and Belfast.

Colin Smith, Director-Engineering & Technology, Rolls-Royce plc said, "We are pleased with the progress made since August to form Aero Engine Controls.

Forming this new company provides an the two companies opportunity to combine their  respective strengths and in to a more effective manufacturing enterprise.