Rolls-Royce Offers $2,500 Payment to Workers as Inflation Bites

That’s especially the case in the U.K., which is suffering through one of the Western world’s highest bouts of rising costs. Inflation hit 9.1% in May, its highest since 1982, the country’s statistics agency reported Wednesday. Rail strikes have hobbled the country this week, with unions asking for cost-of-living increases in wage negotiations.

But companies have become nervous about boosting their own costs, at a time when many are now expecting a significant economic downturn as central banks raise interest rates. Some are slowing hiring, revoking job offers and in some cases letting go staff as they reposition. The governor of the Bank of England, the U.K.’s central bank, has also controversially asked workers not to seek steep pay hikes, warning it would stoke inflation.

Rolls-Royce is one of several major companies and employers in the U.K. offering bonuses to aid employees with higher living expenses. Lloyds Banking Group offered its staff a £1,000 bonus. Oxford University committed to a one-time payment of £1,000 to its staff earlier this month.

Rolls-Royce, a British blue chip that shed its luxury-car business years ago, said earlier this week it was offering 14,000 U.K. employees its first-ever bonus not tied to performance. The bonus came alongside a 4% raise for shop-floor workers.

Union leaders, representing 11,000 of those workers, are holding out for more. The two sides are negotiating after Rolls-Royce management came back with a second, undisclosed offer. “This is a good deal for our colleagues that is fair and competitive, with an immediate cash lump sum to help them through the current exceptional economic climate,” a Rolls-Royce spokesman said.

In a memo to staff outlining the offer, Chief Executive

Warren East

said a simple wage increase isn’t affordable or responsible and would add “too much cost into the long-term wage bill at times of such high uncertainty.” The company derives most of its income from manufacturing and servicing engines for

Boeing Co.

and

Airbus SE’s

biggest wide-body aircraft. Demand for those aircraft, mostly operated on long-haul international routes, is trailing the quicker recovery for smaller jets as the industry emerges from the pandemic-era slump in travel.

The latest bonus offer “falls a long way short of the cost-of-living crisis claim submitted by our members and their expectations,” a spokesman for the union, called Unite, said.

Write to Sara Ruberg at [email protected] and Benjamin Katz at [email protected]

That’s especially the case in the U.K., which is suffering through one of the Western world’s highest bouts of rising costs. Inflation hit 9.1% in May, its highest since 1982, the country’s statistics agency reported Wednesday. Rail strikes have hobbled the country this week, with unions asking for cost-of-living increases in wage negotiations.

But companies have become nervous about boosting their own costs, at a time when many are now expecting a significant economic downturn as central banks raise interest rates. Some are slowing hiring, revoking job offers and in some cases letting go staff as they reposition. The governor of the Bank of England, the U.K.’s central bank, has also controversially asked workers not to seek steep pay hikes, warning it would stoke inflation.

Rolls-Royce is one of several major companies and employers in the U.K. offering bonuses to aid employees with higher living expenses. Lloyds Banking Group offered its staff a £1,000 bonus. Oxford University committed to a one-time payment of £1,000 to its staff earlier this month.

Rolls-Royce, a British blue chip that shed its luxury-car business years ago, said earlier this week it was offering 14,000 U.K. employees its first-ever bonus not tied to performance. The bonus came alongside a 4% raise for shop-floor workers.

Union leaders, representing 11,000 of those workers, are holding out for more. The two sides are negotiating after Rolls-Royce management came back with a second, undisclosed offer. “This is a good deal for our colleagues that is fair and competitive, with an immediate cash lump sum to help them through the current exceptional economic climate,” a Rolls-Royce spokesman said.

In a memo to staff outlining the offer, Chief Executive

Warren East

said a simple wage increase isn’t affordable or responsible and would add “too much cost into the long-term wage bill at times of such high uncertainty.” The company derives most of its income from manufacturing and servicing engines for

Boeing Co.

and

Airbus SE’s

biggest wide-body aircraft. Demand for those aircraft, mostly operated on long-haul international routes, is trailing the quicker recovery for smaller jets as the industry emerges from the pandemic-era slump in travel.

The latest bonus offer “falls a long way short of the cost-of-living crisis claim submitted by our members and their expectations,” a spokesman for the union, called Unite, said.

Write to Sara Ruberg at [email protected] and Benjamin Katz at [email protected]