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Rolls-Royce’s new CEO says he will focus on opportunities and strategic clarity

Three years ago, Tufan Erginbilgic lost a race for a top job at BP. After working for an oil company for 23 years, he later headed for refining and marketing operations before retiring in March 2020.

This week, Erginbilgic caught the attention of the company after being elected to take command of another British industry giant, Rolls-Royce. A 62-year-old woman, a dual Turkish and British citizen, will replace Warren East as Chief Executive Officer in January.

This appointment puzzled some industry experts who were hoping to hit the connection between the City of London and Whitehall. “What makes him think he is eligible to run Rolls-Royce?” Asked one person.

Erginbilgic quoted his experience at BP and, as relevant, spent “a lot of time” on energy transformation. Like Rolls-Royce, he told the Financial Times this week that the Energy Group had a very successful cash-generating business, but needed to invest in a low-carbon world.

“I’m going into Rolls-Royce, focusing on how we can create great opportunities for all our stakeholders,” he said. “My focus is on the clarity of the strategy.”

People who worked closely with him say he is a good operator. Tony Hayward, former BP CEO with Erginbilgic as Chief of Staff, said the next CEO: He is a good appointment for Rolls-Royce at this time. “

Elgin Birgic, who has played a major role as a partner in the Private Equity Group’s Global Infrastructure Partners since leaving BP, will take on one of the toughest jobs in the UK industry.

Rolls-Royce, one of the UK’s oldest industry names, brings a level of political and public surveillance that new chiefs need to navigate carefully. The UK government still holds “golden shares”, which can prevent the acquisition. Erginbilgic needs to build relationships not only with Whitehall, but also with its major customers, Airbus and Boeing.

Samuel Jowhaar, Chairman of the Board Advisory Group, Buchanan Harvey, said Elginbilsik was a “clearly successful division CEO”, but stepping up to become a group CEO was “strategy, external stakeholders, and the public. It’s always big because surveillance plays a much bigger role. “

The engineering champion, a world leader in the manufacture of engines for large jets, is still recovering from one of the worst crises in 116 years of history. The pandemic has stranded many of the world’s fleets, forcing Rolls-Royce to strengthen its £ 7.3 billion balance sheet. New equity and debt.. The restructuring and asset disposal program launched by East is almost complete, but the company is just beginning to generate cash again.

A trained engineer, Erginbilgic began his career in the oil industry at Mobile in 1990 and moved to BP in 1997. He spent several roles in the “downstream” division of the company’s lubricants, refining and marketing, throughout Turkey and Europe.

After two years leading the Chief Operating Officer’s office, which is considered a future leader and a foothold for those who worked closely with Hayward, Erginbilgic was promoted to Chief Operating Officer in the downstream sector. He became its head in 2014 after Iain Conn left to join Centrica.

Rolls-Royce Chairman Anita Flue had already revealed that the board was looking for veteran executives with a record of outstanding operational excellence across the continent before appointing Elgin Birgic.

It needs to be someone who is “accustomed to large, global and complex industrial businesses.” She told the Financial Times last month.

In front of it, Erginbilgic checks the box. Those familiar with his time at BP believe him to have strong industrial expertise with a constant focus on performance and cost savings.

He was “quite technocratic,” one said. “During his time, he really broke the business and put it together again. He turned it around in terms of making a profit.”

For Rolls-Royce investors.Recent history A series of transformation plans Erginbilgic’s focus on revenue may be the breath of fresh air, as it has never been fully realized.

But he needs to balance this with difficult economic conditions. Concerns about high inflation and supply chain constraints were high, and the morale of company employees was hit after thousands of headcount cuts during the pandemic. The challenge of decarbonization is also urgent — and it requires investment as well as partnership.

“This is an interesting appointment. He is older than the current CEO,” said one near BP. “He is the exact opposite of Bernard Rooney [BP’s current CEO]: He doesn’t wake up, be attractive, or become a social media star. He is not a person. His attitude is pretty harsh. “

“Performance is what he does, but performance without EQ can be a challenge. His relationship with Chair Anita Flue will fill some of those voids. So it will be important, “he added.

Despite the challenges, Erginbilgic inherited a company born of a large restructuring in the east and international air travel began to recover. The airline has returned to the market for wide-body aircraft flying on the Group’s engines. Even if the recovery begins, it could be a welcome tailwind for Rolls-Royce and his new CEO.

Rolls-Royce’s new CEO says he will focus on opportunities and strategic clarity

Source link Rolls-Royce’s new CEO says he will focus on opportunities and strategic clarity

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