ROLLS-ROYCE LTD.

British manufacturer of prestige automobiles, automotive and aviation engines, and other engineering products. Founded on March 15, 1906, the corporation entered bankruptcy on Feb. 4, 1971, and was subsequently re-formed into two separate companies: (1) Rolls-Royce Limited, comprising the former jet-engine division, was established in 1971 by the British government and became a government-owned corporation under the control of the National Enterprise Board; (2) Rolls-Royce Motor Holdings Limited, a public corporation owned by remaining shareholders, was formed in May 1973 to operate the divisions engaged in the production of automobiles and diesel engines, automotive and aero components, industrial locomotives, and light aircraft. In 1980 Rolls-Royce Motor Holdings Limited merged with Vickers Ltd., becoming a subsidiary of the latter. A manufacturing and engineering company, Vickers was converted to a public limited company the following year. In 1987 the British government privatized Rolls-Royce Limited, selling the company's shares to private investors. The company altered its name to Rolls-Royce PLC. The headquarters of Rolls-Royce Motor Holdings Limited are in Derby, Derbyshire. Those of Rolls-Royce PLC are in London. Charles S. Rolls, a pioneer motorist and aviator, and Henry Royce, an engineer and manufacturer of electric cranes, met and collaborated in 1904 to produce quality cars; two years later they incorporated Rolls-Royce Ltd. By 1914 their Silver Ghost model (introduced in 1906) had earned its reputation as the Best Car in the World. The reputation was continued by such descendant models as the Twenty (192229), the several Phantoms (begun in 1925 and specially made for heads of states from 1949 onward), the Silver Dawn (from 1949), and the later Silver Cloud, Silver Shadow, and Silver Wraith. In November 1931 Rolls-Royce acquired Bentley Motors Ltd. (founded 1920 by W.O. Bentley), maker of fine cars, which gradually took on mechanical and design characteristics identical to those of the Rolls-Royce line, except for minor details. Meanwhile, over the years, Rolls-Royce was also producing engines for airplanes, an enterprise that eventually became by far the largest and most profitable portion of the company's business. The Eagle engine, produced in 1914, became the first in a line of engines that powered such aircraft as the propeller-driven Spitfires and Lancasters and, later, the jet Comets, Caravelles, and Concordes. In the late 1960s and early 1970s, however, under a fixed-price contract with Lockheed Aircraft Corporation to develop the RB-211 engine for the L-1011 Tristar jumbo jet, the Rolls-Royce management made a series of miscalculations, trying to follow confused production schedulings and vastly underestimating development costs. Cost overruns were staggering, driving the company into bankruptcy in 1971. Lockheed itself was saved from bankruptcy only when the U.S. Congress voted to guarantee loans up to $250,000,000, while the British government saved Rolls-Royce by taking over its jet-engine division.