Dive Brief:
- Rolls-Royce, a maker of advanced commercial and military aircraft engines, has completed its $1 billion investment in Indiana, including renovations, upgrades and additional testing facilities over the past decade.
- The effort began as a $600 million modernization program focused on technology and equipment upgrades, which was completed in 2021. Rolls-Royce later added a $400 million phase that expanded full engine-test capabilities in Indianapolis and West Lafayette to support U.S. defense contracts.
- It is the largest investment that Rolls-Royce has made in the United States to date. Indiana Gov. Mike Braun said the move supports future job growth and bolsters the state as a major manufacturing and defense hub. The Indianapolis campus tests and builds engines for U.S. Air Force, Army and Navy aircraft, such as B-52 bombers and refueling drones.
Dive Insight:
Rolls-Royce expanded its investment plans for Indiana after winning a $2.6 billion Air Force contract in September 2021 to manufacture more than 600 F130 engines for the department’s B-52 bomber fleet.
The company has been building the engines in Indianapolis during renovations, upgrades and new construction at its campus. The first lot of operational B-52s with the new engines is expected to be delivered by the end of 2028, with the entire fleet modified by 2035.
“This billion-dollar investment is about more than buildings and test cells — it is about delivering for the American warfighter, on time and at the standard our customers expect,” Adam Riddle, president of defense and CEO of Rolls-Royce North America, said in a statement. “We made this investment because it was the right thing to do for U.S. national security and for the future of Rolls-Royce.”
The initial $600 million phase began in 2015, with a focus on replacing World War II-era equipment and infrastructure with updated manufacturing technology and capabilities. It also removed inefficient buildings as the company looked to make progress toward its net-zero carbon goals.
The expanded $1 billion investment wrapped as the U.S. Air Force navigates aircraft and engine production delays. The Government Accountability Office reported last month that challenges will likely continue as B-52 engine production begins with “little to no developmental flight testing,” which has raised costs by $3 billion and delayed initial operational capability by more than 15 months.
More Rolls-Royce defense engines are built in Indianapolis than anywhere else in the world, according to the company. More than 3,500 people work there, including union-backed workers. The new test cells, control rooms and other upgrades will be used to test modern, gas turbine engines manufactured on site.
The Indiana Economic Development Corporation offered Rolls-Royce up to $17 million in conditional tax credits and up to $1.43 million in training grants based on the company’s initial $600 million investment. It is not clear whether the company received more incentives for the full project.
