ROLLS-ROYCE, the world's second-largest aero engine maker, yesterday bucked the UK manufacturing exodus with the announcement that it will invest (pounds) 45m in a new factory in East Kilbride - a move which safeguards almost 1100 jobs.
Insiders last night told The Herald that the aero repair and overhaul plant in Lanarkshire won the investment after beating fierce competition from the Czech Republic.
''It was an extremely close thing,'' said one insider, who spoke on condition of anonymity. ''I can tell you that the East Kilbride operation came very, very close to packing up and heading to Eastern Europe.''
Rolls-Royce declined to name the country, but sources identified it as the Czech Republic - the same nation which lured Compaq's desktop computer production from Renfrewshire in 2001 with the loss of more than 1000 jobs.
The announcement yesterday brings Rolls-Royce's capital investment in Scotland within the past year to (pounds) 130m.
At the end of 2003, Rolls-Rolls announced the completion of an (pounds) 85m production plant at Inchinnan, near Glasgow Airport, which manufactures aero engine compressor blades, securing a further 1000 Scottish jobs.
The company, which has operated an aero repair and overhaul facility in East Kilbride since 1953, turned down a (pounds) 25m incentive package from the Czech Republic last year to switch compressor-blade production there, and accepted a (pounds) 15m grant from the Scottish Executive to build its ''centre of excellence'' at Inchinnan.
Rolls Royce yesterday said its aero repair and overhaul facility will relocate to a new purpose-built factory - at a site which is yet to be identified - in East Kilbride between April 2006 and January 2007.
Graeme Waddell, the company's business director at East Kilbride, said: ''We are now in a position to move forward with detailed examination of the site that will best suit our needs. We will be consulting widely with external stakeholders, and planning applications will be submitted shortly.''
The commitment, which this time is backed by an (pounds) 8m grant from the Scottish Executive, also secures 3000 sub-contracting, service sector and supply network jobs dependent upon the Rolls-Royce operation.
The company, which began restructuring its business after the September 11, 2001 terrorist attacks, praised its East Kilbride workforce, which it said was key to its decision to keep the operation in Scotland.
A company spokesman said: ''The skill of the workforce and their commitment ... was key to choosing East Kilbride for the (pounds) 45m investment.
''The investment in East Kilbride further demonstrates the company's commitment to the UK and to Scotland.''
Rolls-Royce's aftercare business, which includes its repair and overhaul operation, is hugely important to the company and has become the fastest-growing part of the business in recent years.
In its unique business model, Rolls-Royce sells its engines relatively inexpensively in exchange for lucrative long-term maintenance and overhaul contracts - such as its current 14-year, (pounds) 325m deal with Virgin Atlantic to maintain the airline's Trent 500 engines.
Yesterday's announcement was welcomed across the board by Scottish business leaders and politicians alike.
Adam Ingram, the armed forces minister and the MP for East Kilbride, said: ''This is excellent news for East Kilbride and Scotland. It's also a major vote of confidence for the workforce, which have faced up to some harsh global economic realities but have come out on top.''
WITH THE JET-SET: Graeme Waddell is poised to put Rolls's plans into action. Picture: Peter Sandground
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