UNION leaders at Rolls-Royce have expressed their bemusement that the firm is still looking to cut staff at its Derby factory, despite reporting a rise in profits and orders.

Yesterday, the company, which has its civil aerospace and marine divisions in Derby, recorded full-year profits of £880m in 2008 – a 10% increase on 2007.

It also said that the company had a record order book of £55.5bn – £9.6bn up on 2007.

Although the company has predicted a challenging 2009 due to the global economic downturn, it believes it is well-positioned to weather the storm.

But unions are amazed that, despite a successful 2008, the company is still looking to press ahead with job cuts at the civil aerospace factory in Sinfin.

In November, Rolls-Royce announced it was shedding 140 jobs at its engine assembly and test facility at Derby, blaming "economic uncertainties".

Then, towards the end of last month, the company confirmed that it would be shedding a further 240 positions at Derby – part of a plan to cut 2,000 jobs across its global workforce of 39,000, which was announced back in November.

The company employs 12,500 people in Derby – 10,500 in civil aerospace and a further 2,000 in its marine division, in Raynesway.

Steve Wright, Rolls-Royce works convenor for Unite at the Sinfin factory, said: "I think staff are well within their rights to ask the question that if the company is doing so well, why are so many being forced out?

"At the moment, we are making just as many engines as we have been doing in the past couple of years, so what has changed?

"Because we are losing these staff now, it will put extra strain on the remaining workforce. To my mind, Rolls-Royce should be using these profits to keep staff because when the upturn comes, the company will need them."

Rolls-Royce has now entered into a 90-day consultation with staff as it looks for volunteers willing to leave.

But Mr Wright believes that in the current economic climate, few would risk voluntary redundancy and when the consultation period ends, compulsory redundancies will have to be made.

He said: "We should know by the end of May who will be going. The company has previously said that it is making the cuts because of economic uncertainties.

"But management have been saying to us that they simply don't know what the future holds.

"If they are cutting jobs now, does that mean they know something we don't?"

Yesterday, Mark King, president of civil aerospace for Rolls-Royce, who is based at Derby, said that the company had needed to make "tough decisions early", which were in the firm's best long-term interests.

He said he understood why some staff may question the cuts.

But he said that 2009 would be a challenging year for the company. Rolls-Royce has already forecast profits for the year ahead to be the same as 2008 because of the global economic downturn.

He said: "The economic situation has changed significantly over the last 12 months. We saw some very different market conditions in the second half of 2008.

"These conditions, combined with delays in aircraft programmes, have impaired productivity.

"It has to be remembered that the job cuts are not just being made at Derby but across the whole civil aerospace division. This is about ensuring that Rolls-Royce continues to be around for the long-term.

"2009 is extremely difficult to forecast. We are expecting the growth in the civil business to be more gradual than it has been in previous years and that growth in our other divisions, particularly marine and defence, will be better."

Before the announcement of its results yesterday, Rolls-Royce's share price lost some of its value, amid concerns that the company would announce a pensions deficit.

But the company said in its financial results that its pension schemes overall were in surplus.

The company has moved much of its pension assets out of equities, which had proved volatile, and in 2007, the company injected £500m into its UK pension funds