What’s Driving Rolls-Royce in Mankato?
The news last week that Rolls-Royce opened a new $24 million expansion of its Mankato facility probably has many people wondering: What is Rolls-Royce doing in a Greater Minnesota city of 45,000 people?
For most of us, Rolls-Royce means fabulously luxurious automobiles. And those cars are still being manufactured. But there’s another Rolls-Royce that doesn’t make cars. Sound confusing? Here’s an abridged version.
Start with a little history: In 1904, mechanical engineer Henry Royce and automobile designer Charles Rolls joined forces to make luxury cars. When World War I broke out, Rolls-Royce began manufacturing airplane engines, the basis of what would become the company’s massive defense business.
But by the 1970s, the Rolls-Royce story became a tangle of financial difficulties leading to bankruptcy, UK government intervention, and complicated asset sales. To make a very long story very short, Rolls-Royce Motor Cars now operates as a subsidiary of BMW. A separate company, Rolls-Royce Holdings, is an aerospace and defense firm that’s also involved in other businesses, including power generation systems.

Here’s where Mankato becomes part of the story.
That plot line begins in 1952, when entrepreneur Cecil Jones left Mankato-based Kato Engineering to launch Katolight, which manufactured power generators for agricultural and industrial customers. It grew to be a global company. In 2007, Katolight was purchased by Tognum Group, a major German manufacturer of diesel engines and power systems. Four years later, Rolls-Royce Holdings acquired Tognum, later renaming it Rolls-Royce Power Systems. The former Katolight is now part of the Solutions America division of Rolls-Royce Power Systems. The Mankato facility manufactures high-power backup generators for customers worldwide, most notably airports, hospitals, and data centers.
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Not surprisingly, the data center industry is powering much of Rolls-Royce’s Mankato expansion. Rolls-Royce reportedly supplies backup power systems to more than a quarter of U.S. data centers. Despite resistance to new data center construction in many communities (including Mankato), demand for backup power for these projects is poised to explode. The expansion would allow Rolls-Royce to more than double production capacity for its MTU-branded generator sets. The company is expected to add more than 100 jobs in Mankato, a nearly 20% workforce increase.
And that’s what’s driving Rolls-Royce in 80 miles southwest of the Twin Cities. It’s not a fancy business, but so far, it’s been motoring along with plenty of power.