Rolls-Royce

Charles Rolls and Henry Royce met at the Midland Hotel in Manchester on May 4, 1904. Rolls was a wealthy aristocrat and motoring enthusiast who sold cars in London; Royce was a self-taught engineer from a poor family who had built his own car in Manchester. Rolls drove Royce's car and declared it the finest he had ever driven. They agreed that Rolls would sell all cars Royce could produce, badged as Rolls-Royce. The partnership united social connections with engineering genius.

Rolls-Royce launched the Silver Ghost in 1907 — a 40/50hp car that The Autocar magazine declared "the best car in the world" after a 15,000-mile reliability trial. Henry Royce's engineering philosophy — "Strive for perfection in everything you do. Take the best that exists and make it better" — established standards of quality and reliability that became the foundation of the Rolls-Royce mystique.

Rolls-Royce — which by the 1960s had become primarily an aero engine manufacturer while the car division remained a smaller part of the business — collapsed in 1971 under the weight of fixed-price contracts for the RB211 jet engine, which proved far more expensive to develop than estimated. The British government nationalised the company to prevent its collapse, separating the aero engine business (Rolls-Royce plc) from the car business. The two companies have operated independently ever since, sharing only the name and the Spirit of Ecstasy mascot under a licensing arrangement.

Vickers sold the Rolls-Royce car brand in 1998 in one of the most complicated transactions in automotive history. Volkswagen paid £430 million for Rolls-Royce Motor Cars — only to discover it had bought the factory and the car designs but not the rights to the name, which were controlled by Rolls-Royce plc (the aero engine company). BMW paid £40 million for the brand name rights. BMW and Volkswagen agreed that Volkswagen would build Rolls-Royce cars until 2003, after which BMW would take over. BMW's Goodwood factory has produced the Phantom and subsequent models from 2003 onward.

Rolls-Royce aero engines power wide-body long-haul aircraft — the category most devastated by COVID-19. Rolls-Royce's revenue model depended on flying hours, so when planes stopped flying, revenue collapsed. The company raised £2 billion in emergency capital in 2020, cutting 9,000 jobs. CEO Tufan Erginbilgin, appointed in 2023, launched a transformation programme that returned the company to profitability. By 2024, Rolls-Royce was reporting record underlying operating profit of £2.5 billion and the stock had recovered dramatically from its pandemic lows. The aero engine company that had gone bankrupt in 1971 and needed emergency rescue in 2020 was generating its strongest financial performance in decades.