UPDATE 2-Rolls-Royce aero boss King makes surprise exit

Thu May 2, 2013 5:28am EDT

* Aerospace president King to leave at end-June

* Marine unit boss Tony Wood to replace King

* Rolls sees good profit growth in 2013 after strong Q1

By Rhys Jones

LONDON, May 2 (Reuters) - Britain's Rolls-Royce has announced the surprise departure of Mark King as boss of its key aerospace business, after only four months in charge of the newly merged division.

King, who had spent 27 years at Rolls, was previously head of its civil aerospace business and became chief of the combined civil and defence aero division in January.

Rolls gave no reason for his departure. A company spokesman said it was King's personal decision to leave, but did not say if he would get a payoff and declined further comment. King could not be reached for comment.

Rolls, the world's second-largest maker of aircraft engines behind U.S. group General Electric, said King would be replaced by Tony Wood, president of its marine unit, on May 13. Wood, who has spent 12 years at Rolls, has previously worked as an executive across its aerospace business.

Analyst Sandy Morris at brokerage Jefferies said King was "a highly regarded member of the management team ... reflected in the perceptions of investors and analysts alike", adding his departure was "not going to pass unremarked".

Morris said he assumed King was leaving Rolls "for personal reasons".

Aerospace accounted for 8.8 billion pounds of the group's 12.2 billion revenue in 2012.

King led the relaunch of an engine designed for the largest version of the Airbus's long-haul A350 to try to puncture the success of Boeing's rival 777, backed by General Electric.

SMALLER JETS

The overhaul boosted sales of the aircraft, but some analysts have questioned whether the redesign went far enough.

King also oversaw a realignment in the market for smaller jets triggered by a revival in the fortunes of U.S. supplier Pratt & Whitney (part of United Tecchnologies ).

Rolls agreed to be bought out of a consortium supplying engines for Airbus jets, but struck a deal to co-operate with Pratt & Whitney for a future generation of engines.

Rolls is also engaged in a review of compliance procedures after Britain's Serious Fraud Office (SFO) launched an investigation into claims that Rolls representatives paid bribes to win airline engine contracts in Asia.

Late last year Rolls said it could face prosecution after the SFO ordered it to conduct an internal inquiry into possible bribery and corruption by intermediaries in China, Indonesia and other overseas markets.

The group hired lawyer David Gold to review its compliance procedures.

Rolls, a major British exporter which dates back to 1884, also said it was on track to report good profit growth in 2013 after a strong first quarter from its civil aerospace unit.

Last month it won a $1.6 billion order from British Airways-parent IAG for Trent XWB engines to power 18 of its new A350 jets.

The firm is expected to report a 2013 pretax profit of 1.74 billion pounds, according to a Thomson Reuters poll.

Shares in Rolls-Royce, which have risen 30 percent so far this year, were flat at 1,133 pence by 0815, valuing the firm at around 21.2 billion pounds.

Lawrie Haynes, boss of Rolls' nuclear unit, has been appointed to a new position as president of marine and nuclear.

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.