Rolls-Royce appoints acclaimed technology executive as CEO
By Paul Sandle
LONDON (Reuters) - Aircraft engine maker Rolls-Royce (RR.L: Quote) has turned to one of Britain's most successful technology executives, Warren East, to restore its fortunes after a year marred by falling profit, job cuts and canceled orders.
The British company's surprise announcement on Wednesday said that John Rishton would retire in July after four years at the helm and will be succeeded by the former head of ARM Holdings ARM.L, Britain's biggest listed technology company.
East, who has been a non-executive director of Rolls-Royce since January last year, was chief executive of ARM between 2001 and 2013, overseeing its expansion as a leading developer of microchips for the likes of Apple (AAPL.O: Quote) and Samsung (005930.KS: Quote).
Shares in Rolls-Royce rose to an eight-month high in early trading, with JP Morgan (JPM.N: Quote) upgrading the stock to "hold" from "underweight".
Analysts at the bank said that East, 53, would bring renewed vigor to the development of civil aviation engines and to the challenges posed by shrinking western defense budgets and a lower oil price that has squeezed customers in the oil gas and marine sectors.
East, who plays the organ at his local church and favors sober suits rather than the polo-shirted look adopted by many U.S. technology executives, said that the opportunity was one he could not refuse.
Rolls-Royce Chairman Ian Davis, meanwhile, spoke of East's "stellar record" at ARM since taking over after the dot-com bubble burst in 2001. A pound invested in the company's stock a couple of years later would have been worth 18 pounds ($27) by the time he left.
East's engineering background with ARM is also seen as a key attribute as Rolls-Royce looks to develop quieter and more efficient engines for aircraft made by Boeing (BA.N: Quote) and Airbus (AIR.PA: Quote), Edison Research analyst Roger Johnston said. Continued...