HRM / OB Case Study

Rolls Royce Retrenchment Strategy: Beneficial or Detrimental?

OR

Abstract:
In 2007, Rolls Royce decided to close down one of its manufacturing units in Merseyside, UK. This led to a large-scale retrenchment of its workforce. The decision was massively resented by the largest trade union body of the UK, Unite. They felt that Rolls Royce was unjustly retrenching its highly skilled and loyal workforce. It doubted the company's real intention behind the proposed closure. The company totally nullified the allegations made by Unite. It claimed that to circumvent the rising overhead expenses, it had been forced by circumstances to take such a measure. This resulted in industrial disputes and mass agitations by the workers.

Pedagogical Objectives:

• To understand the factors that instigated the retrenchment of the skilled workforce of Rolls Royce.
• To analyse the controversies that stormed between the company and the trade unions due to the decision of closure followed by subsequent retrenchment of its workforce.
• To analyse the role of human resources policies in shaping the image of a company.

Keywords :  Closure, Downsizing, Trade Union disputes, Industrial relations, Worker's Participation in Management (WPM), Tripartite meetings, Bipartite meetings, Relocation issues, Restructuring strategy, Negotiation process, Labour unrest, Political intervention