Rolls-Royce threatens to move jet engine project to US or Germany in snub to Labour
Story by John-Paul Ford Rojas December 16, 2025
Rolls-Royce could build a new range of jet engines in Germany or the US instead of Britain, in what would be a major blow to Labour’s faltering growth hopes.
The FTSE 100 aerospace giant is being actively courted by politicians in Berlin and Washington over a programme that will create 40,000 jobs across the company and supply chain.
It comes as surging energy costs – blamed on Ed Miliband’s Net Zero drive – are making it harder to make money from manufacturing in Britain.
Derby-based Rolls-Royce is looking to re-enter the narrow-body engine market – worth £1.6 trillion globally – for planes used on shorter-haul flights.
It is in talks with the Government over financial support for the programme – which Labour has identified as a key part of its industrial strategy.
Expand article logo Continue reading
And it is understood that developing the engines in Britain is the preference of boss Tufan Erginbilgic, who has led a turnaround of the UK manufacturing giant.
But insiders believe there are ‘plenty of options’ outside the UK. And without the taxpayer support it is seeking – in the hundreds of millions of pounds – it will weigh up building the engines in Germany or the US, two countries where it already has manufacturing sites – and where energy is much cheaper, the Daily Mail understands.
The company is seeking financial backing from the UK towards some of the project’s £3billion research and development costs. But it estimates the business could generate more than £100billion for the UK economy.
For Rolls-Royce to launch such a major manufacturing business overseas would be seen as a body blow to Britain.
It would echo other Labour setbacks, such as AstraZeneca scrapping a £450million vaccine plant on Merseyside.
Last month, the operator of the Channel Tunnel said it had cancelled future investments in the UK thanks to its soaring tax bill – further adding to fears that Keir Starmer’s government is driving business away.
Rolls-Royce declined to comment yesterday. Labour has placed the development of narrow-body jet engines at the centre of its industrial strategy.
Rolls-Royce builds engines for the wide-body long-haul aircraft such as the Airbus A350, having left the narrow-body market a decade ago. It is trying to re-enter the market, which includes Airbus’s A320.
They represent a much larger number of aircraft, used on shorter routes such as flights within Europe.
But the UK manufacturing sector is under huge strain because of soaring energy bills.
Firms face electricity prices that are 50 per cent more expensive than in Germany and France and four times as expensive as in the US, a recent report from Santander warned.
The report blamed successive governments for running down North Sea oil and gas resources that could have eased the transition to green energy – leaving consumers and businesses to foot the bill.
More:
https://www.msn.com/en-us/money/companies/rolls-royce-threatens-to-move-16-trillion-jet-engine-project-to-us-or-germany-in-snub-to-labour/ar-AA1Sp9aC
More sauce:
Rolls-Royce could move production out of UK over Labour's crippling policies in huge blow
https://www.express.co.uk/news/uk/2147443/rolls-royce-production-labour
Rolls-Royce May Shift £1.6 trillion Jet Engine Project to US or Germany
https://www.flightaware.com/squawks/view/1/1_year/new/100134/Rolls_Royce_May_Shift_1_6_trillion_Jet_Engine_Project_to_US_or_Germany
Rolls-Royce issues ultimatum to Labour over £100 BILLION jet engine deal as Britain could lose 40,000 top jobs
https://www.gbnews.com/money/rolls-royce-threatens-labour-move-operations