Rolls-Royce Limited

1906–1987 UK automobile and aerospace manufacturer
the business between 1904 and 1987

Rolls Royce Limited was a British luxury car and later an aero engine manufacturing business established in 1904 in Manchester by the partnership of Charles Rolls and Henry Royce. Building on Royce's good reputation established with his cranes, they quickly developed a reputation for superior engineering by manufacturing the "best car in the world". The business was incorporated as "Rolls Royce Limited" in 1906, and a new factory in Derby was opened in 1908. The First World War brought the company into manufacturing aero engines. Joint development of jet engines began in 1940, and they entered production in 1944. Rolls Royce has since built an enduring reputation for the development and manufacturing of engines for military and commercial aircraft. In the late 1960s, Rolls Royce was adversely affected by the mismanaged development of its advanced RB211 jet engine and consequent cost over runs, though it ultimately proved a great success. In 1971, the owners were obliged to liquidate their business. The useful portions were bought by a new government owned company named "Rolls Royce (1971) Limited", which continued the core business but sold the holdings in British Aircraft Corporation (BAC) almost immediately and transferred ownership of the profitable but now financially insignificant car division to Rolls Royce Motors Holdings Limited, which it sold to Vickers in 1980. Rolls Royce obtained consent to drop the '1971' distinction from its company name in 1977, at which point it became known once again as "Rolls Royce Limited". The Rolls Royce business remained nationalised until 1987 when, after having renamed the company to "Rolls Royce plc", the British government sold it to the public in a share offering. Rolls Royce plc still owns and operates Rolls Royce's principal business, although, since 2003, it is technically a subsidiary of Rolls Royce Holdings plc, a listed holding company. A marketing survey in 1987 showed that only Coca Cola was a more widely known brand than Rolls Royce.

Rolls Royce Limited was formed on 15 March 1906, by which time it was apparent that new premises were required for production of cars. After considering sites in Manchester, Coventry, Bradford and Leicester, it was an offer from Derby's council of cheap electricity that resulted in the decision to acquire a site on the southern edge of that city. The new factory was largely designed by Royce, and production began in early 1908, with a formal opening on 9 July 1908 by Sir John Montagu. The investment in the new company required further capital to be raised, and on 6 December 1906, £100,000 of new shares were offered to the public. In 1907, Rolls Royce bought out C. S. Rolls & Co. The non motor car interests of Royce Ltd. continued to operate separately.

During 1906 Royce had been developing an improved six cylinder model with more power than the Rolls Royce 30 hp. Initially designated the 40/50 hp, this was Rolls Royce's first all new model. In March 1908, Claude Johnson, Commercial Managing Director and sometimes described as the hyphen in Rolls Royce, succeeded in persuading Royce and the other directors that Rolls Royce should concentrate exclusively on the new model, and all the earlier models were duly discontinued. The new 40/50 was responsible for Rolls Royce's early reputation with over 6,000 built. Its chassis was used as a basis for the first British armoured car used in both world wars.

Aero engine manufacturing began in 1914 at the government's request. Springfield was the earlier location for the Duryea Motor Wagon Company, the location where the first American gasoline powered vehicle was built. Bodies for American assembly were supplied by Brewster & Co. in Long Island City, New York.

After the First World War, Rolls Royce successfully avoided attempts to encourage British car manufacturers to merge. Faced with falling sales of the 40/50 Silver Ghost in short lived but deep postwar slumps Rolls Royce introduced the smaller, affordable Twenty in 1922, effectively ending the one model policy followed since 1908. By far the oldest known British Rolls Royce stock certificate]]
In 1931, Rolls Royce acquired Bentley, the small sports/racing car maker and potential rival, Daimler's Ferret, Humber's Hornet and Pig and Austin's Champ.

After the war, in 1946, Rolls Royce and Bentley car production moved to Crewe where they began to assemble complete Rolls Royce and Bentley cars with body pressings made by the Pressed Steel Company (see W. A. Robotham). Previously they had built only the chassis, leaving the bodies to specialist coach builders. In 1939, Rolls Royce brought one of the specialist coachbuilders completely in house by buying the remaining capital of Park Ward Limited which, since 1936, in conjunction with Rolls Royce had been building short production runs of all metal saloon bodies on Bentley chassis. In 1959, Rolls Royce bought coachbuilder H J Mulliner An exchange of assets followed with Rover and in the post World War II period Rolls Royce made significant advances in gas turbine engine design and manufacture. The Dart and Tyne turboprop engines were particularly important, enabling airlines to cut times for shorter journeys whilst jet airliners were introduced on longer services. The Dart engine was used in Armstrong Whitworth AW.660 Argosy, Avro 748, Fokker F27 Friendship, Handley Page Herald and Vickers Viscount aircraft, whilst the more powerful Tyne powered the Breguet Atlantique, Transall C 160, Short Belfast, and Vickers Vanguard, and the SR. N4 hovercraft. Many of these turboprops are still in service. Amongst the jet engines of this period was the RB163 Spey, which powers the Hawker Siddeley Trident, BAC One Eleven, Grumman Gulfstream II and Fokker F28 Fellowship. During the late 1950s and 1960s there was a significant rationalisation of all aspects of British aerospace and this included aero engine manufacturers. In 1966 Rolls Royce acquired Bristol Siddeley (which had resulted from the merger of Armstrong Siddeley and Bristol Aero Engines in 1959) and incorporated it as the Bristol Siddeley division. Bristol Siddeley, with its principal factory at Filton, near Bristol, had a strong base in military engines, including the Olympus, Viper, Pegasus (vectored thrust) and Orpheus. They were also manufacturing the Olympus 593 Mk610 to be used in Concorde in collaboration with SNECMA. They also had a turbofan project with SNECMA. Leavesden Aerodrome, Watford was originally owned by the Ministry of Defence and used during World War II for the manufacture of Mosquito and Halifax aircraft. For a number of years, Rolls Royce used the site for the manufacture of helicopter engines until the site closed in June 1993. The former Rolls Royce factory at Watford is now known as the Leavesden Film Studios and has produced world famous films, including the James Bond, Star Wars and Harry Potter series.

The amalgamations and disappearances of the 1950s and 1960s left a small number of major airframe manufacturers based in only a few countries. The competition for the very large contracts to supply their engines grew intense. Expensive research and development became vital. Real profits came from the maintenance contracts which might peak a whole human generation later. By the 1980s it was said that each generation of aero engines cost around 10 times that of its parent. At this time Rolls Royce employed 80,000 people and it was Britain's 14th largest company in terms of manpower. It was generally known that problems had recently arisen requiring government support of the RB211 programme as one outcome of intense financial competition with Pratt & Whitney and General Electric for the original RB211 contract. In the new year of 1971 financial problems caused largely by development of this new RB211 turbofan engine designed and developed for Lockheed Aircraft Corporation's new L 1011 TriStar led, after several government provided cash subsidies, to the recognition Rolls Royce had no resources left and it voluntarily entered receivership 4 February 1971. There were said to have been acrimonious telephone conversations between US president Richard Nixon and the British prime minister Edward Heath but these were subsequently denied. Responding to questions as to how the situation could have arisen the chief executive advised that in their calculations they were guided by the success of their estimates in the launching of their Spey engine. Had the government simply nationalised Rolls Royce it would have been unable to avoid the obligations to Lockheed. The situation was handled in the usual manner with the assets being sold for cash, in this case to the government, leaving the massive liabilities to be dealt with by Rolls Royce Limited using the funds realised by the sale. However the government would not fix a purchase price for the assets until the situation became clearer because without a continuing business many of them might be worthless. In the meantime the government would use the assets to continue the activities of the aero engine, marine and industrial gas turbine and small engine divisions that were important to national defence, the collective programmes with other countries and to many air forces and civil airlines. A new company (1971) was incorporated that May to purchase substantially the whole of the undertakings and assets of the four divisions of Rolls Royce connected with gas turbine engines. The original company, Rolls Royce Limited, was placed in liquidation on 4 October 1971. The receiver negotiated with Lockheed which consented to waive damages allowing the plant to be shut down. The continuing support of the trade creditors was also achieved by the receiver in spite of threats to demand immediate payments in full and to withdraw supplies. The first asset sold was British Aircraft Corporation bought equally by Vickers and GEC. The receiver floated Rolls Royce Motors in 1973.

The new aircraft with its three RB211 engines left USA for the first time and arrived in Paris on 1 June 1971. At Palmdale California the L 1011 received its US Federal Aviation Administration's certificate of airworthiness on 14 April 1972, nine months late. On the day the chairman of Lockeed said " we know that in airline service it (RB211) will prove itself to be one of the leading power plants in aviation history". The first airliner was delivered to Eastern Air Lines on 5 April 1972 but it had been beaten in the race to production by McDonnell Douglas's DC 10.

Rolls Royce Motors Limited was incorporated on 25 April 1971, two and a half months after Rolls Royce fell into receivership. Under the ownership of the receiver, it began to trade in April 1971 – manufacturing motor cars, diesel and petrol engines, coachwork and other items previously made by Rolls Royce's motor car and diesel divisions and Mulliner Park Ward. It continued to take on precision engineering work on sub contracts. In June 1971, it acquired all the business and assets used by the motor car and diesel divisions of Rolls Royce and Mulliner Park Ward. Rolls Royce Motors' permitted uses of the various Rolls Royce trade marks were very precisely defined.

On 6 August 1980, the shareholders' agreement to the merger of Rolls Royce Motors Holdings and Vickers Limited became unconditional. Vickers would sell Rolls Royce Motors to Volkswagen Group in 1998 without the trademark, which was controlled by the aeroengine company, so it was renamed to Bentley Motors, with BMW then establishing a new manufacturer named Rolls Royce Motor Cars.

The Rolls Royce diesel business was acquired from Vickers in 1984 by Perkins Engines. Perkins further developed the Eagle Diesels into the Perkins TX series of engines.

The name of Rolls Royce (1971) Limited was changed to Rolls Royce Limited on 31 December 1977 the end of the company's financial year. The original Rolls Royce Limited incorporated in 1906 and still in liquidation had been renamed Rolls Royce Realisations Limited and had consented in March 1977 to the (1971) company being named Rolls Royce Limited

Limited was replaced by plc (public limited company) in the summer of 1986 so shares could be offered to the public and traded on sharemarkets.