Why Rolls Royce is Dealing With its Worst Nightmare

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Why Rolls Royce is Dealing With its Worst Nightmare Powered By Docstoc
					Rolls Royce, one of the big three engine makers (along with General Electric and
Pratt & Whitney) has been living its worst nightmare for the past couple months. Its
troubles began in early August when their Trent 1000 engine experienced an
uncontained failure during Boeing 787 testing. The Boeing 787 project was already
heavily delayed, and this failure pushed back the EIS (Expected entry Into Service)
even further. Engine failures in general aren't usually a major safety hazard. However,
the difference that set this apart was that this failure was uncontained. The vast
majority of engine failures are contained, meaning that no components of the engine
leave the casing. While this can be dangerous, most commercial jetliners today have
the capacity to fly with less engines. Contained failures don't make a huge difference
to safety unless multiple engines fail at one given time. However, uncontained failures
are different. A failure is considered uncontained when components of the engines fly
out at high speeds. The flying pieces of debris fly at high speeds, and are extremely
dangerous if they hit the airframe. Having an uncontained failure during an engine test
is very bad news for any engine maker, and Rolls Royce found itself devoting a lot of
resources that could be helping the company's bottom line in order to fix the issue.
Having an uncontained failure during testing for a new plane is disastrous for both the
engine maker and the airframe developer (Boeing). Then, disaster struck again when a
Rolls Royce Trent 900 engine experienced an uncontained failure on a Qantas A380
as it departed Singapore. Qantas Airlines is known for its impeccable maintenance;
they haven't had a hull loss since the beginning of the jet age. Both engines that
experienced uncontained failures are members of the Trent family, causing critics to
worry about the safety of Trent engines. Even more worrying about this failure is that
the A380 was in new condition, since the plane has been in service for a very short
amount of time. Qantas, not wanting to sully their perfect safety record, immediately
grounded all A380s while inspections took place. To make matters worse for Rolls
Royce, Qantas discovered oil leaks in 3 more engines. This prompted Singapore
Airlines and Lufthansa Airlines (the other 2 airlines using Trent 900 engines) to
conduct emergency inspections for oil leaks. Singapore Airlines discovered what they
refer to as "oil stains" on 3 of their airplanes. Singapore Airlines grounded the planes
while it replaced the engines. Lufthansa didn't find any leaks or stains, but their
aircraft are very new, and they aren't sure whether the leaks will develop in the future.
Even worse, Rolls Royce determined that the two failures were unrelated. This is
another cause for concern. If the two failures were connected by a common
engineering mistake, it would have given people peace of mind that Rolls Royce only
has to fix one thing and their engines will be alright. However, by having multiple
engine difficulties, it makes people worry that more glitches are out there, waiting to
be caught. Then, Rolls Royce was rocked by another engine failure when a Qantas
747 equipped with Rolls Royce engines experienced a contained engine failure while
departing Singapore. Even though it was contained, confidence in Rolls Royce
dropped sharply again, with its stock getting battered. Then, Pratt & Whitney sued
Rolls Royce over a patent infringement connected to Trent 900 and 1000 engines, the
two engines that failed catastrophically. That caused Rolls Royce to devote resources
and spend money fighting out a case in court. Through this whole time, Rolls Royce
has been a PR disaster, not working hard enough to assure people that their products
are safe. The real winner through this whole thing? General Electric. With Rolls
Royce's reputation so tarnished, GE is free to sell their engines at higher prices to
airlines. Since Rolls Royce and GE compete mostly on the lucrative long-haul market,
GE will be able to increase profits. Right now, Rolls Royce should be worried about
getting shut out of the market. If Rolls Royce doesn't right their ship soon, they may
soon find that they have nowhere to go but bankruptcy.

				
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posted:2/24/2011
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