Rolls-Royce Hires in—Get This— High-Wage Countries

Industrial giant ignores wisdom of rivals
By Dustin Lushing,  Newser Staff
Posted Oct 23, 2011 4:35 PM CDT
Dan Balmer, marketing and event manger Asia Pacific of Rolls-Royce Motor Cars, stands next to the new Ghost Extended Wheelbase during its launch in Mumbai, India, Wednesday, Oct. 5, 2011.   (AP Photo/Rafiq Maqbool)
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(Newser) – The British industrial behemoth Rolls-Royce is increasing its revenue by way of an unorthodox strategy: moving operations into high-wage countries with highly skilled workers. The plan contradicts the wisdom of rivals, who are moving production into low-wage areas in Asia and Latin America, reports the Wall Street Journal. The tactic is also paying off. Rolls-Royce saw revenue spike 55% over the last 5 years and gained a net profit of $1.3 billion over the first half of 2011.

"If you want to do complicated, high-value engineering, you've got to have a good supply of skilled people and support from governments," says Rolls-Royce CEO John Rishton. His strategy includes setting up facilities in expensive countries such as Germany, Norway, and Singapore. But even with generous pay, Rolls faces a shrinking pool of engineering talent that's being lured into finance and computers. Balancing skills and cost "is walking a tightrope," Rishton says. "We wrestle with those issues all the time."

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