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Rolls-Royce: ‘Turbo Tufan’ on the culture changes powering a share price revival

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Transport Reporter

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The chief executive behind Rolls-Royce's remarkable share price turnaround has outlined his view on what's changed at the engineering giant.
The chief executive behind Rolls-Royce's remarkable share price turnaround has outlined his view on what's changed at the engineering giant.

The chief executive behind Rolls-Royce’s remarkable share price turnaround has outlined his view on what’s changed at the engineering giant.

Tufan Erginbilgic, fondly nicknamed ‘Turbo Tufan, highlighted his close management style and cultural shifts at the company as key to its success.

He previously described Rolls as “grossly mismanaged” and a “burning platform”.

But shouting at everyone to do better? “That’s not my style, frankly,” he said in an interview with Times Radio. “First of all, we do everything systematically so that there are sustainable improvements.”

That doesn’t mean Erginbilgic isn’t all hands on deck. “No [other] CEO actually approved every deal, I now approve every deal, then we look at key OEM and key airline contracts in similar space, and either concluded the renegotiation of all of them, or progressed some of them last year,” he said.

Shares have soared more than 250 per cent since Erginbilgic’s arrival, with investor’s backing his no-nonsense cost-cutting approach.

And profits more than doubled last year alongside record free cash flow, with the company valued as the best stock on Europe’s Stoxx 600 index of largest listed companies.

“When you do these things, it energizes the team,” he said, describing a decision to go back to an airline to negotiate and reclaim £100m in lost debt. “It’s not small number, 100 million came back to Rolls-Royce that, frankly, nobody knew existed.”

Erginbilgic’s widely publicised criticism of former management had centred around financial underperformance. “Every investment we make, we destroy value,” he told employees at the time.

Speaking this morning, the new boss highlighted the new mindset shift.

“Are you making the business better tomorrow than today, rather than chasing a bunch of numbers that you may call budget?”

“And if you remember many of our investors, sort of complaining about our numbers, we are not very clear, etc. Because internally, we weren’t very clear, we are definitely running this business differently.”

But he refused to be drawn back into slamming previous underperformance. “I think I’m gonna put it positively… there are lots of high quality people given what we do. Probably it’s not a surprise, frankly, lots of quality people and deep engineering expertise. Those are great things.”

“What we are looking to do is a little bit more proactive culture, performance management. People tell me about strategic progress rather than a bunch of numbers that when you hit the numbers will not mean anything. And I want everybody in Royce Royce to think I am here to make a difference.”