Rolls-Royce pioneers 'job swap' scheme to avert redundancies

Ministers are backing a ground-breaking "job swap" initiative under the leadership of the aero-engine maker Rolls-Royce. Instead of laying off workers in a downturn, engineering businesses have signed up to a privately run "employment exchange" scheme for transferring them to companies with better order books.

Staff working for 20 firms in the East Midlands can continue to work for their new employer or return to their original company when demand picks up. In some cases the technicians will be retrained to undertake new tasks, in others they will simply continue to use existing aptitudes.

The scheme is set to shift to companies in the West Midlands and has won the support of ministers who are anxious to take the pain out of a flexible labour market.

The Government has come under sustained fire for failing to take measures to ensure that skills are not lost to manufacturing. Amicus, the skilled workers' union, has given the programme its blessing and is anxious that it should be extended to other regions and industries. A senior official at the union said that provided it was not used as a substitute for a "coherent Government policy towards manufacturing" and that workers were not forced to move to new firms, then it would receive the union movement's backing.

Under the existing programme Rolls-Royce and 19 other regional firms pool their personnel resources to ensure skilled engineers are not lost to the industry. The idea, outlined at the recent annual conference of the engineering skills council SEMTA, resulted from the decline in orders suffered by the aero-components industry following 11 September, 2001.

Phil Derges,the project manager for the Midlands Engineering Industries Redeployment Group, said: "With this scheme we can start a new social reform - ending the scourge of redundancy."

Ivan Lewis, a minister at the Department of Education and Skills, added: "This [initiative] can benefit everyone involved in our fast-changing industry."