Rolls-Royce Revs Its Engine (Factory)

Rolls Royce Crosspointe

The Rolls-Royce Crosspointe facility outside Petersburg is growing, demonstrating once again that economic development projects are hard to predict but can reward patience. A story posted at the Times-Dispatch reports another batch of new jobs may bring the total close to 400 this year.

When it was announced in 2007, the first plant built from the ground up by Rolls-Royce in the United States was to be the centerpiece of an economic cluster around aerospace manufacturing. The 2008 General Assembly adopted special legislation creating an Aerospace Engineering Manufacturing Performance Grant Program aimed not just at Rolls-Royce but at suppliers it was expected to attract.

The worldwide recession tempered expectations but ground was broken and the first assembly line created in 2009. Investment and employment flattened out, however. A second product line was added in 2014 keeping alive hopes of further investments. The most recent VEDP report on the incentive program showed 250 jobs (of the promised 642) and $267 million of capital expenditure (out of $501 million set as a target.)

As a consequence, out of about $50 million in possible grants, only $5 million had been paid out, VEDP reported in 2017. Now that activity is finally accelerating it may be possible for the company to qualify for more grants.

The Rolls-Royce deal was unusually creative for Virginia. The company asked that the University of Virginia and Virginia Tech add faculty and programs tied to their product lines. It asked Virginia to create an industry-driven research consortium, the Commonwealth Center for Advanced Manufacturing, and build a home for that on the same property. Done, but in reality CCAM has been struggling.

So Virginia’s total investment for what may now be 400 manufacturing jobs would take some time to calculate. What always attracted me to this deal was that all the individual elements added value beyond the target company. What Rolls-Royce asked Virginia to do was make investments that were smart on their own – in fact the kind of things Virginia should focus on if it is serious about economic development. I have long worried that the failure of Rolls-Royce to meet its targets weakened the legislature’s interest in further innovations.

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3 responses to “Rolls-Royce Revs Its Engine (Factory)

  1. That’s interesting I did not know we had Rolls Royce …I know they make some good jet engines for Boeing and Airbus. Sounds like they are making parts in Va. but not the final engines?

  2. “The most recent VEDP report on the incentive program showed 250 jobs (of the promised 642) and $267 million of capital expenditure (out of $501 million set as a target.)”

    When I bid on a contract I have to declare not only what will happen but when it will happen. I take it that neither 250 jobs nor $267m in capital expenditure is on track relative to where we thought we would be today back in 2009.

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