Subsidies for Rolls-Royce might seem a bit rich, but they are inevitable

"Erginbilgic made two points about state subsidies and both are correct. First, it's just how life works in the aerospace business. Every country plays the support game, and overseas rivals get two or three times as much financial help. Governments do it because of the knock-on gains in the manufacturing supply chain, which yield economic returns that can be many multiples of the outlay."

"For Rolls's fuel-efficient UltraFan development engine, he floated 40,000 jobs and a big boost to the balance of trade figures, since 80% of the product would be exported. The company would appreciate financial support from the government to smooth work on a new engine."

"Rolls is now the UK's fifth most valuable listed company. The share price has risen from 90p to almost 13.52, up another 3% as Thursday's full-year numbers came with raised guidance on medium-term profits, demonstrating the most astonishing improvement at a major UK company in years."

Rolls-Royce, a highly profitable defence and engine manufacturer generating substantial cash for shareholder returns, is requesting UK government financial support of up to £200m for developing a new fuel-efficient engine called UltraFan. While this appears contradictory given the company's financial strength and previous receipt of billions in Covid-era loan guarantees, CEO Tufan Erginbilgic argues such subsidies are standard practice in aerospace. He contends that overseas competitors receive two to three times more government support and that state investment yields economic returns through manufacturing supply chains. The UltraFan project promises 40,000 jobs and significant export benefits, with 80% of production destined for international markets. Rolls-Royce has demonstrated remarkable financial recovery, with its share price rising from 90p to £13.52, making it the UK's fifth most valuable listed company.

Read at www.theguardian.com