The Turning Point: The Necessary Collapse of Rolls-Royce (Part 2)

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0:55Thanks for listening to A Long Time in Finance with Jonathan Ford and Neil Collins.

1:09welcome back to the second in a two-part series on the turning point where we're looking at the moment in 1971 when rolls royce went spectacularly bust trying to produce a new jet engine a large jet engine for an american manufacturer called lockheed and we'll in this part be arguing about whether this was indeed the turning point which, in a paradoxical way, helped create the very successful Rolls-Royce that exists today. So if you haven't listened to our first Rolls-Royce episode, you might want to do so first. It explains how Rolls pioneered the jet engine business, how it sought to stay in the front rank of engine makers for airlines, and how it got into such a massive pickle with the RB211 project.

1:57So I suppose it's 4th of February 1971 and Rolls-Royce has gone into receivership and the British government, because it really is now up to the British government to some extent, faces a big dilemma. It's just seen basically one of Britain's great companies go down the tubes, which is never a good look. And the newspapers are talking about Westminster Abbey turning into a brothel, which is also not good. But let's start by looking at What was Rolls-Royce in 1971? Because it obviously wasn't just the RB211 jet project they'd been working on. So around a quarter of its aero engine sales were military.

2:34And a lot of those went to the Royal Air Force, supplying new engines, spares. All of that, you would say, was pretty vital national work. And there was a secret nuclear submarine business, which was definitely vital national work. Yeah, interesting thing that the power plant for the nuclear submarines, is now considered the basis for so-called mini-nukes to produce electricity on land. Yes, it's certainly why they're in that business. And alongside the RB211 project, there are a lot of civil aviation contracts supplying and maintaining engines for British Airlines. You know, the BOAC, BEA, remember BOAC, now all British Airways.

3:16They all buy their engines and there are lots of other airlines which are dependent on Rolls-Royce. And around a tenth of the business is a luxury car business, which was profitable and could, in theory, stand on its own two feet. So there's no question, really, that bits of the Rolls-Royce business can be retrieved from bankruptcy. And indeed, they really have to be. The really big question mark, though, is essentially over the RB211. It depends not only on Rolls-Royce, but it depends on finding a customer for the engine, hopefully Lockheed, who were the buyer, but now the whole thing is in trouble.

3:50and indeed Lockheed itself is in trouble because its TriStar project, on which it had pinned a lot of its hopes, is now very much hanging in the balance, rather like the Airbus before it is suddenly potentially turned into a superb glider. And the question is, basically, does the government believe that the RB211 is a good idea? And that actually is, you know, the government is very engaged in the future of Rolls-Royce, but the idea that they would effectively fund the RB211 project to completion is very far from certain because the Minister of Aviation Supply is a splendid figure called Fred Caulfield, who is a pig farmer from Gloucestershire, who's not massively interested in his brief, I think.

4:34And he has come to the conclusion that basically the RB211 is unnecessary luxury that Rolls-Royce can't afford. And he turns up in the House of Commons after the failure of Rolls-Royce. And he says, I'm not even sure there's a big market for this sort of engine. Using his expertise. Pig-based expertise. Or pig ignorance, as I would say. And then he says, anyway, he says, to a large extent, it's behind engines of equivalent power and performance. He's actually saying it's a rubbish engine, which is not as good as a competition. So if you base your expectation on that, you'd say, hmm, it's not very clear that the government is supportive of the RB211.

5:20Fundamental to solving the problem is you've got to basically go back to the drawing board with the contract and come up with something where I think it's one of those classic situations where everyone has to give something up. The government probably has to put in a bit more money. Lockheed have to make concessions and Rolls-Royce have to make some concessions too. But the key thing is that Lockheed is itself basically going bust at the time. And the American government, therefore, because it depends on Lockheed for lots of military contracts, is very involved in the discussions about what the hell is going to happen with this contract.

5:57The first question is, is the RB211 good engine? And we talked about the data that came through just prior to the collapse of Rolls-Royce, where finally an engine which had really struggled to perform, as had been promised, suddenly started to work. And the second question is, how long is it going to take to make it work? Is it good enough? Can it be put into production quick enough? I think basically what really changes their mind, the person I think is quite important in changing government's mind is a guy called Lord Carrington, who was the Minister of Defence in 1971. And he basically conducts an assessment under a man called Stanley Hooker.

6:42And he says, can this engine actually work? And how quickly can we get into into production? And Hooker says, you can, it's going to take an extra six months, and you're gonna have to put in 120 million quid. But he says it's going to work. and Hooker is therefore appointed by the government to the board of Rolls-Royce. He assembles rather splendidly, it's a bit like a kind of the Magnificent Seven or something, he assembles a whole bunch of wartime engineers long past retirement and says, right lads, we're going to fix this. And basically they go to work and they iron out the problems in the RB211.

7:17And it's about a year late in the end, but it doesn't get any worse and gets a lot better. The second question, though, is whether Lockheed can be persuaded to change the contract, particularly when they themselves are so up against it. Basically, what Lockheed do is Lockheed rerun the engine competition. They basically say, well, maybe we need to build the Tristar with another engine. Maybe we can't rely on Rolls-Royce. So they basically go through the same process of assessing the various options. And amazingly, I still find it staggering that this was the conclusion. But the assessment panel will come back and go, no, we still think Rolls-Royce is the right choice.

7:59We think it's going to be too expensive and difficult to reconfigure this for a different end. I mean, it was a huge technological leap. And there's the idea that the competition could suddenly catch up without any great warning. and with the demonstration that the concept actually worked on test. So we're given them a pretty strong competitive advantage. So it's perhaps not quite so surprising. I suppose it's really the question of the cost and delay involved in, you know, accommodating a different type of engine rather than the one you're expecting. It was, you know, GE had a perfectly good engine, which they wanted to sell to it.

8:40Well, yes, but it wasn't anything like as good as the RB211. Because for all the technological reasons we've been talking about. Yes, yes. Although those hadn't necessarily been completely proven at that point. But yeah, I agree. So, you know, they obviously bought, fundamentally bought into the idea that Rolls had produced an engine which was better. Which was, after all, that's what the American strategy was all about. It was all about essentially selling something because it was so much better than the alternative. The guy who's running Lockheed is a guy called Dan Horton. and he actually is also pretty important in keeping the rb 211 alive he kind of gets it that essentially if the rb 211 goes lockheed is itself in deep trouble and the tristar is probably out of the game he's offered early on by by the receiver your hero rupert nicholson says to him listen old man would you would you like engines or would you like damages let's talk turkey and he says I want engines not damages so he basically says he wants the contract fulfilled not basically voided yeah well because he knows that if he has if he has damages he has a pile of dollar bills and no business yes and he has no airplane so basically he then Horton goes back to the customer airlines and he says look guys it's going to be a delay are you still going to fulfill your orders or are you going to walk away?

10:07And weirdly, the customers are all quite keen. Now, some of the customers, it has to be said, are actually thinly disguised, basically, the UK government who have ordered quite a lot of Tri-Stars for British Airways and persuaded Cathay Pacific in Hong Kong to buy lots because that's good for Rolls-Royce and good for Britain. And in those days, you could do that. A happier time. Hong Kong, of course, is entirely independent and Cathay was never going to do exactly as they were told. But of course, they did. They'd say, we'll get a hand Hong Kong back to China unless you buy some dry stars. And they went, OK, we don't like the sound of that.

10:46We'll have some dry stars then. And TWA, which is one of the big customers, says, actually, we're pretty skint at the moment. So having a delay would be great for us too. So don't worry. So actually having weak customers was helpful. It's the story of the airline industry, really. they're all on either making out like bandits or on the brink of bankruptcy. And it sort of knocks on through the airframe and the engines. Yeah. So Horton does the other magic bit, which is he goes to the Richard Nixon's administration in Washington and he says, look, here's the new deal. It's going to cost everyone some money.

11:22You need to put in some money into us and then we'll agree a contract with Rolls-Royce, a new contract and basically the Tristar will be fine. And after a bit of humming and haaring, the Congress approves$250 million of official loans from the US government to Lockheed. It's able to raise a further$400 million from the banks and that shores up its finances so it can tolerate the additional delays and the additional prices from Rolls-Royce. So on the 25th of March 1971 so it's surprisingly quickly it's amazing how quickly it's only like six weeks can you imagine it happening today they'd have set up a committee to look into it to report in 2027 yeah so they basically strike a new deal 555 engines revised prices delivery date and allowed increase in engine weight and around 20 of the sales go to the uk state-owned airlines or airlines under the thumb of the British government, like Cathay Pacific in Hong Kong, and all is well.

12:22So the RB211 is sort of reprieved, but they still need to build it. On the other side, basically Rolls-Royce is going through and restructuring, unsurprisingly, between 1971 and 1972. They sell off the car business. Actually, surprisingly, I think the government paid 50 million for the aero engine business. So it was quite a good deal for them too. You think they sold it for 1.4 billion in 1987? although they had to put in a bit more money but debenture holders were repaid in full for Rolls Royce and the ordinary shareholders got 62 and a half I think you mean the ordinary creditors and the shareholders wouldn't get maybe unsecured creditors got 62 and a half I think it couldn't be shareholders has a new chairman you probably know this man, Sir Kenneth Keith certainly do well he was a pretty serious character I mean nobody in their right mind would cross him he was really old school city highly regarded extremely tough and intelligent and i would say an excellent choice yeah the chairman yeah because you didn't argue with him yeah and we'll come to his relations with tony which are i have to say a question of the dialogue of the deaf i think but uh anyway he introduces a bit of financial discipline the managers who basically implicated in the whole rb 211 fiasco all disappear denning pearson just resigns at the time of the collapse and david huddy who was the boss the knighted boss of the aero engine division he basically having gone on sick leave in 1970 he never comes back and one rolls-royce manager notes the kind of different atmosphere under keith's leadership he said first thing we had to learn was that the company was not a playground for engineers to amuse themselves.

14:06And Hooker and his team get the RB211 working. It's certified in April 1972. The first Eastern Airlines, Tristar, flew on the 26th of April. And Hooker was the third Rolls-Royce executive to be knighted for the RB211 and the only one associated with success rather than disaster. So that's the kind of, that's the short term. But in the long term, the RB211 is really important to Rolls-Royce. and we'll just sort of... Well, it was important then and important now. It was important to keep it alive, the aero engine business alive. But it becomes, it's actually, I mean, the truth is, it is kind of what they hoped it would be.

14:44In fact, I think, as we'll discover, it cracks up to be even better as a product than they had anticipated in their wildest dreams back in... I mean, the great thing about the new technology, once they'd got it working, they discovered that it was capable of much further extension and producing numbers which would have seemed incredible at the time in 1971. Yeah, so the key thing is the three-spool technology we've talked about turns out to be really easy to scale up. So the biggest thing, you can make more and more powerful engines without going through the agony of a complete redesign. Over time, the thrust on an RB211, which starts at around£40 ,000 in the Tri-Stars, goes to£50 ,000 by 1973.

15:30And Boeing is so surprised by how impressive this engine is that they say, oh, well, we'll offer it to customers of the Boeing 747, which is, I mean, amazing outcome when you think about the fact that they had been locked out of the American market up till that point. And there are kind of extraneous factors which make the RB211 much more attractive than it would have appeared to be in the 60s, like the oil crisis of 1973, which unsurprisingly makes fuel efficiency quite an important criterion. So there's a thing about Qantas, the Australian airline bought Rolls-Royce-powered 747s. When they did it, the airline said, oh, we've gone with the RB211 because it burnt 7 % less fuel than our Pratt & Whitney-powered fleet.

16:10And that was, well, it doesn't sound like much these days, saving only a million dollars a year, but it was probably more then. That's just on filling the tank. A million, is it? Yeah, exactly. And also, as you... I'm not sure what Qantas' profits were, but I think it was probably a meaningful percentage. The basic technology means a quieter engine, which again gets more and more important as we get fussier and fussier. The main thing, of course, and this is where you always get very steamed up, Neil, about nationalised industries, because Rolls-Royce is nationalised industry. And there's a whole question of how you manage your relationship with your shareholder and whether the government starts to do mad things and get you to pursue silly projects and what have you.

16:52And of course, in the 1970s, by 1974, the Conservatives are long gone and are replaced by the Labour Party. And guess whose ministry or the industry secretary? It's our old friend, Mr. Benn, who's still absolutely absorbed with excitement by the aviation industry. He likes that a lot. Ben arrives in 1974 with this mad idea that he's going to issue instructions to all the chairman of the largest companies in Britain on investment projects and things that they should be getting on with. So Keith has to manage this as chairman of Rolls Royce. He's very good at keeping, I think, at keeping Ben in his box.

17:30But a flavor of their relationship comes from Tony Ben's exhaustive diaries, where he records a meeting he had with Kenneth Keith in February in 1974 to discuss, you know, his agenda as industry secretary, having just got the job. Keith said when he'd taken the job in 1972, he'd told Edward Heath, who was then the Prime Minister, he would take it as long as I'm not buggered about by junior ministers and civil servants and officials. Ben recorded, it was a bitter exchange. And at the end, Keith said, I hope we can get on well together with you as my minister, I added, and the owner of your company.

18:05So he said, but not my employer. I said, I'm inclined to say to you what my sergeant said to me in the war. You play ball with me and I'll play ball with you. Anyway. The great advantage, of course, is that Ben had far too many other problems to worry about. The idea of taking on Kenneth Keith as something which, if he didn't have to do it, it would be rather a foolish thing to do. Yeah. And also, Ben gets a sack in 1975. he gets replaced by somebody called Eric Varley with whom Keith seems to get on much better. And then under the Conservatives from 1975, Keith, still there, persuades the government basically to take a much more backseat approach to ownership and essentially just to put in money when it's required and otherwise to shut up, which...

18:51I told you he was a strong character. But it took time. You know, it doesn't... The RBA 211 takes time really to come into its own partly because of the 1970s it's such a absolute shit show for the aviation industry because of oil prices and the general recession people have ordered lots and lots of aircraft in the beginning of the 70s which they can't fill so everything gets very quiet towards the end of the 1970s then obviously you have the oil crisis of the late 70s and in the early 80s rolls royce has several years of losses partly it should be said because in 1982 lockheed give up the ghost with the TriStar.

19:30It's too expensive to run. From the 1970s, it becomes possible. We talked earlier about the question of how many engines you needed to have on an airplane to cross the Atlantic. Overwater twins. Overwater twins. They're called? Overwater twins. It was a thing called ETOPS. I can't remember what it stands for. But basically, it's the regulation says you basically can be sufficiently far away from land in a twin-engine airplane that you can go across the Atlantic. So that's why everyone... Even if both engines fail, that was the point. Yeah, but they've decided the engines are so efficient. No, they've decided that the airframe is so efficient from cruising height.

20:06You can glide hundreds of miles. Basically say twin engines can cross the Atlantic, which is why nowadays virtually everything is twin engines, because it's cheaper for petrol. Rolls-Royce has a few years of losses in the early 80s, and there's a moment where it kind of thinks, well, we will have to build a successor to the RB211, and they remember the terrible time they had in the 1960s. 60s, Mrs. Thatcher, who's then in power, is very keen to privatise it. And the idea of basically developing a very expensive aircraft at the time you're trying to be sold to the stock market doesn't sound very appealing to the shareholder, to put it mildly.

20:43So what they do in 1984 is they do something which looked as if it was going to basically be a sign of some defeat after all this heroic recovery in the 70s they basically enter a partnership with GE where effectively GE basically take a stake in the RB211 and they take a stake in a much larger engine that GE is planning to make around 60 ,000 pounds of trust and essentially what this is doing is saying we Rolls-Royce will do the smaller engines and GE will be the bigger engines for us so it's kind of capping their ability to compete and leaving the field to some extent to g now at this point of course the world's least patriotic newspaper the financial times chips in with grim satisfaction that finally another british company with ideas of being globally competitive has learned the grim lesson that uh and they can't and so they produce an article which is headlined rolls-royce faces up to reality they're writing about this deal and they say by swapping a share in one of its new engines for a stake in one of General Electric's, Rolls has finally moved away from a course which it has followed in the large civil engine market for the last 20 years.

21:57A course which has taken this proud engineering company into bankruptcy and which more recently left it with an increasingly weak position in the market for high-thrust commercial engines. It's absolutely typical of the FT. They're always pretty down on the UK, even if they acknowledge that we exist. Yes. Anyway, and the article also cited Ralph Robbins, who's a man who later became chief executive of Rolls-Royce, saying, to develop the RB211 up to£60 ,000 of thrust would have effectively required the designers to start with a clean sheet of paper. On this basis, the project could have cost$1 to$1.5 billion or more.

22:33And this was essentially basically money that, as we said, state-owned RR, Rolls-Royce didn't have, and the Thatcher government wouldn't have given it and they didn't want it happening when they were trying to privatise the company. And Ralph Robbins knows as much about engineering as I do about gynecology. I don't want to pursue that line of inquiry at all. But he's wrong. Anyway, he admits Ralph Robbins got it wrong and he basically then changes his mind. Because basically the RB211 turns out that they didn't have to redesign it with a clean sheet of paper. They could just basically tweak it and they could get the thrust to the level required.

23:08So by 1986, they've basically launched their own£60 ,000 thrust turbofan in competition to the GE engine they actually own a stake in. And essentially, they are winning orders when they're up against GE. And basically, by the end of 1986, the alliance is dead and is unwound. So basically, Rolls-Royce discovered they don't have to partner. They can continue to increase the size of this turbofan and it will be successful. And indeed, it is still basically the designs that they use today are essentially derivatives of the RB211. The engine they bring in at the end of the 1980s called the Trent is basically they go up to around 90 to 100 ,000 pounds of thrust.

23:53The Trent, when it's launched, which takes it from 60 to 90 ,000 pounds, costs just 400 million pounds to develop. When you think that that's probably what the RB211 cost in 1971, it gives you a sense of how basically handy it is to have something which you can get to work. It was a brilliant concept. Yeah, and even today, the trend, which is the top of the range Rolls-Royce air engine used in all the major airlines or aircraft, is basically based on the same technology that Rolls-Royce developed between 1966 and 1972. So I suppose we should end by just looking at, you know, we talked about this being a turning point.

24:36We'll come on to the turning point issue, but just to look at where things stand, I suppose the best measure is market shares. So Rolls-Royce was privatized in 1987. At that time, it had around 10 % of the market for sales of big turbofans, up from zero in obviously 1971 when it was nationalized. By 1990, so within three years, that had risen to about 20%. By 2000, it was up to about 30%. And remember also that the market itself expanded dramatically after the end of the Cold War. So Rolls-Royce sold its first engines to the Russian manufacturer Tupolev in 1992. So whereas Rolls-Royce delivered just 128 wide-bodied engines in 1982, it delivered 525 by 1995 and 1541 by 2001.

25:24So it's quite dramatic growth. By 2022, that's now pretty well almost now, it holds a 50 % market share in new engine deliveries, which has taken its installed global base. that all the big turbofan engines installed in aircraft around the world to a high of 36%. So I think that's pretty impressive. I think it's an incredible story. It is an incredible story, yeah. And it does show that government intervention in something which has real potential rather than just pie in the sky can produce an enormously satisfactory return for the nation as a whole, shareholders and taxpayers alike. So those who say all government intervention is wasted, I think, should look at this and reconsider.

26:16Ah, here we are. It's about heaven rejoicing. The sinner that repented. But I think we should conclude this by basically, because the name of this series is a turning point. I suppose the question we might want to look at is, was 1971 genuinely a turning point? Was it the moment where it all changed? I mean, obviously, there are lots of things that happen subsequently. Things go right. People discover things and what have you. But would it have been possible for Rolls-Royce to avoid bankruptcy in 1971 and still be the same company today? No, it's the short answer to that. That's the short answer.

26:55But I want to go through a little bit of... I dare say you do. Yeah, I know. You know me. I like the long-winded approach. Right. I mean by 1971 no they were headed for the rocks and nothing was going to prevent the backrupts. I agree I agree I agree I think we can take that as read it's more the question of I suppose there are four scenarios where you can say Rolls-Royce could have basically well we don't know what would have happened you don't know the counterfactual but it would have at least not founded in 1971 but in all cases I think by not foundering in 1971 it would be a very different company to what it is today.

27:32So the first scenario is not building the RB211 at all and just sticking with smaller jets and defence, much like the rest of UK aerospace. I think if that had been the case, I don't know what you think, Neil, it would still be around, but it would be a much smaller company probably doing joint ventures with other European aero engine manufacturers to produce jets for 737s or whatever. I think I'd be more pessimistic than that. I think that it would certainly be a smaller company it would be kept afloat by military contracts of decreasing size and value and probably it would have sold its civil expertise to somebody else probably one of the American manufacturers.

28:16I agree and if you think about it as a military company after the cold war ends it's basically it would lose all the civil growth and would just end up with a kind of as you say, declining defence business. Second scenario, could you have done the RB211 and financed it more sensibly? Obviously, the RB211 has a cost explosion. I think even had Rolls-Royce doubled or tripled the number of shares in issue by doing an enormous rights issue, which would never have got past the shareholders, I just can't see any way in which they would have been able to handle the cost problem that they encountered in 1971.

28:53Well, especially after issuing cash for the takeover of Bristol, which I suspect would turn out to be a waste of money. Without that, there was a possibility, but I think it's highly unlikely. I think they, well, I think, first of all, the Bristol deal was a done deal by 1966. So it was already, it had happened. It's not true, by the way, that it didn't bring them anything. It did bring them two things. It brought them the engines for concord the olympus and it brought them the sold 14 planes and i think it sold none actually okay i think the government gave them to air france and boac or ba and the other is the pegasus which was the airplane engine that powered the harrier anyway i think we can agree that it's basically they can never finance it i don't think could they have done it on their own could they have done it with a joint venture with a US manufacturer.

29:46Well, the question then is who? Basically, at the time in the late 60s, Pratt & Whitney and General Electric had their own designs. They didn't want to do a deal with Rolls-Royce. They had their home patch, which they wanted to defend. Rolls-Royce did try in the mid 60s with Allison, which was an engine maker owned by General Motors, but they couldn't strike a deal. They just couldn't find a way. And also, Allison would have added almost nothing apart from possibly cash. I don't think anyone who was not in the big jet business in the 1960s would have been up for the wild ride at the RB211. And that's why they just couldn't get Allison interested.

30:22So I think they can't do it in a in a joint venture. There just isn't a joint venture partner available. Well, joint ventures are by their nature unstable. Yeah. And in the end, one partner becomes dominant and essentially takes out the other one way or another. And the question is whether you would have been able to run a joint venture successfully through all the crises of the RB211. I think you'll probably find that you'd end up having huge arguments when the call went out for another 100 million quid. I don't think that's realistic. The most intriguing, I think, which I think could have conceivably happened, but I think you'll disagree, is not to do the Lockheed deal where they had to give away the ranch to get the contract, but to go with Airbus.

31:10And Airbus clearly really, really wanted Rolls-Royce to build the larger jet for them. The Airbus project was slower. It was not going to launch until 1974. Obviously not a brilliant time for aircraft sales, but it was better selling plane than the Tristar. It did have buy-in from all the European manufacturers. And I think if they had gone with Airbus, they would have got all of Airbus's business for many years, as it was by going with the Americans with Lockheed, they didn't get a single Airbus contract until 1995. I suppose the counter argument to that is it would have required Rolls-Royce to genuinely believe that Airbus basically would work.

31:48And it was much more of a conceptual idea at that stage. I mean, Airbus is almost the exception that tests the rule, because it is a terrifically successful joint venture. Well, it's now a listed company. It's gone. Yeah. But I mean, it's essentially quite. But these pan European ventures, by and large, are not runaway successes, let's say, and getting the governments to agree would be quite a challenge, especially if either Airbus or through Airbus Rolls Royce needed more capital, which I dare say they would have done. And it's at that point where you'd have to do political deals to satisfy the various political constituencies.

32:36So I think, I mean, I'm a great fan of Airbus and it is a great success. But if I'd been advising roles at the time and I said, well, you know, do you want this paper airplane or do you want to go where the market is for passenger jets? I tend to agree. I think it's one of those ones with hindsight, you would say, actually, there's a very strong case for it. But in the heat of the moment in the mid 1960s, it would have seemed implausible to pass up the opportunity to go with a big US manufacturer to take a total punt on a European large aircraft pioneering venture that had no certainty of existing at all.

33:16So I think we're agreed. There's basically I think this is genuinely a turning point it's a very unusual situation where a company fails and is nationalized and it is the foundations of its future success and i think we should just end by talking about who are the heroes i think i've got i think i've got three heroes of this story i.e people who helped to bring it about i'd say one is carrington lord carrington for basically not going with the mad caulfield pig based assessment of 1971 and basically saying hang on a moment let's just to make sure we're not giving up too early. I'd say the engineers, the heroic kind of dirty dozen or whatever they are, Stanley Hooker and his wartime engineers coming back to save the day.

33:58Because we always like a bit of a memory of the Second World War. It's almost like a Netflix series, really, isn't it? And the third point you'll probably agree with is Kenneth Keith for basically fending off Tony Benn and putting him in a headlock, which is always a good thing with Tony Benn. Yeah, I mean, Kenneth Keith. And I might add Rupert Nicholson. because he kept the show on the road. Rupert Nicholson, you should say who he is. He was the receiver appointed by the government when roles went bust in 1971. An extremely competent accountant who I think has actually also did a couple of DTI inquiries extremely thoroughly.

34:35He kept the business together. He saw that the worst thing that could happen would be essentially to see it broken up and the expertise lost just to get the receivership done. So he was there for a long time, I think. Yeah. And I think that touches on a last important point, which goes right back to the beginning of this, the first episode, when I quoted Sue Allen, the employee, who basically writing about the time when the whole thing went bust. Rolls-Royce was undoubtedly a very paternalistic organisation in the past, but it had a very, very strong culture. I mean, the fact that you can get all those engineers out of retirement to come and try and save the day.

35:14The fact that the workforce really stuck together in 1971 and didn't all scatter for the hills. And the fact that Sue Allen was laid off by Rolls-Royce in 1971 and then rejoined and essentially spent the whole of the rest of her career right working for Rolls-Royce and beyond, I think is a testament to the amazing kind of... It really is, I think, a very strong culture which helped keep the whole show on the road when it was really up against it. Yeah, I agree with that. It was helped by having so many engineers who believed in what they were doing. So in some ways, it's not a very British story.

35:52It's one of success, triumph, long-term risky bet on the future of an industry which pays off. So brilliant. Huge and multi-generational success. So all there is to say is hurrah. Quite. If only we had more of them.

36:13That was A Long Time in Finance with Jonathan Ford and Neil Collins. Production and editing by Nick Hilton. If you enjoyed the show, please rate and review it on your podcast app as that will help new listeners find us.