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The Reyrolle Story: 50 - Rolls-Royce Power Engineering

The Tyneside manufacturing concer Reyrolle, now part of Rolls-Royce Power Engineering, continues to decline.

To purchase a copy of Robert Owen's history of the firm please visit http://www.amazon.co.uk/Reyrolle-Story-History-Co-Ltd/dp/1905295073/ref=sr_1_1?ie=UTF8&s=books&qid=1245678876&sr=1-1

While this was going on, another major corporate announcement was made in April 1989. This confirmed that the Boards of NEI and Rolls Royce, the large aero engine and materials handling manufacturer, had reached an agreement to merge the two companies. Many business observers were suspicious of Rolls Royce's intentions and the Guardian described the merger as "an unequal marriage with NEI firmly in the back seat".

NEI Reyrolle temporarily retained its name until 1993, when it became part of Rolls-Royce Power Engineering. The former Reyrolle element was now even a smaller part of a huge conglomerate which employed 60,000 workers. Also its new title was a bit of an anomaly because for decades Reyrolle had been known as the "Rolls Royce" of switchgear manufacture.
The new Managing Director for the former Reyrolle element of the massive organisation was Dr Stan Jones.

The use of modern technology in Reyrolle has a chequered history. During the 1960s the initial use of computers and related equipment was for accounting and production purposes. In 1969, after the Reyrolle-Parsons get-together, a decision to centralise computer facilities north of the river near the Parson's site, didn't help the Reyrolle case. In 1977, with the formation of NEI, the concept of a centralised computer facility was tried and proved impractical. The de-centralised bandwagon rolled on.

Two years later, a new facility was installed at New Town Works as computing returned to Hebburn, but divisionalisation in Reyrolle made further decentralisation inevitable, as the various Divisions created their own systems. In 1988 the wheel came off again when the Company decided to centralise all its computer systems. After the Rolls-Royce merger, the computer service was finally awarded to an outside contractor.
Looking back, it is an undoubted fact that Reyrolle had always relied too much on orders from C.E.G.B (65% of output in 1985) and the dependency on a large, domestic market bred complacency. The Company had "too many eggs in one basket" and when, in 1990, the transmission activities of the C.E.G.B were transferred to a new National Grid Company, who, immediately set up radical new procedures to manage the electrical system more competitively; Reyrolle were in big trouble.

Coupled with these domestic changes, a new procurement directive from the European Union also opened up the markets for switchgear and related equipment. As is often the case, the willingness of the UK Government and the new utilities to rigidly follow these regulations, was not matched by European buyers. Indeed, many resorted to ingenious methods which enabled them to exclude UK suppliers. The overall effect on Reyrolle was a further, significant erosion of the home market without any corresponding gain in Europe. Perhaps the Company's future lay elsewhere?


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