A Falkirk-based bus manufacturer has said 400 Scottish jobs are at risk as it announced a consultation on its UK manufacturing strategy.
Alexander Dennis said the consultation process will look at consolidating its UK bus body manufacturing operations into a single site in Scarborough.
It would see its Scottish-based manufacturing in Falkirk discontinued and the site closed, with production lines at Larbert "suspended upon the completion of current contracts".
The consultation places up to 400 roles at Alexander Dennis at potential risk of redundancy - representing approximately 22% of its workforce.
Alexander Dennis, which is owned by Canadian parent firm NFI Group, has a significant presence in the UK, employing 1,950 people directly.
Additionally, it has a UK supply chain that supports its operations, employing a further 6,350 people.
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The firm said the proposed restructure "will lower overall costs, deliver clearer responsibilities and increase efficiency by removing duplicate functions and activities".
Paul Davies, Alexander Dennis President & Managing Director, said: “We are proposing a new UK manufacturing strategy to underpin financial sustainability and lower operating costs in the face of changing and challenging market dynamics.
“Together with our parent NFI Group, we are extremely proud of our UK history and legacy dating back to 1895 and firmly believe in our people, products and business. We must take significant action to drive efficiency to allow our operating model to be competitive. It is extremely regrettable that as part of this, we must place jobs at potential risk of redundancy and propose to cease manufacturing operations at some of our facilities.
“While stakeholders have been sympathetic of the situation, the stark reality is that current UK policy does not allow for the incentivisation or reward of local content, job retention and creation, nor does it encourage any domestic economic benefit. We have warned of the competitive imbalance for some time and would like to see policy and legislative changes that incentivise the delivery of local benefit where taxpayer money is invested. We strongly believe funding that supports public transport should lead to investment in local jobs, domestic supply chains, technology creation and a recurrent tax base.
“It is our hope that the forthcoming industrial strategy will provide reassurance that there is value in manufacturing within the borders of the UK and we remain hopeful of policy and legislative changes that increase the UK’s focus on support for domestic manufacturing. Our new strategy would allow us to respond appropriately to increase local production if structural changes are made.”
Responding to news of the consultation, Deputy First Minister Kate Forbes said: “This will be a hugely worrying time for the workforce at Alexander Dennis, their families and the wider community.
“In recent weeks, the Scottish Government has engaged extensively with Alexander Dennis and its parent company NFI to understand the issues and ensure that every possible avenue is explored to mitigate the need for redundancies. This has included discussions with myself, the First Minister, leadership within Scottish Enterprise and Transport Scotland and the UK Government.
“The Scottish Government will continue to explore any and all options throughout the consultation period to allow the firm to retain their hard-working employees and manufacturing and production facilities at Falkirk and Larbert. In the event of any job losses, the Scottish Government will provide support through our Partnership Action for Continuing Employment initiative.”
Stephen Kerr, Conservative MSP for Central Scotland, said: "Devastating news from Alexander Dennis. The loss of bus manufacturing in Falkirk and Larbert demands urgent action.
"Both the UK and Scottish Governments must step up—with real support for workers and a strategy to back British-built vehicles."
Euan Stainbank, Scottish Labour MP for Falkirk, said: “This news is bitterly disappointing for the local work force and our community, and I think the company have acted too quickly when other options could have been considered before launching this consultation.
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"I will continue to work tirelessly to advocate for solutions that maintain bus manufacturing in Falkirk and get it back on track after years of broken promises to our domestic manufacturers by Boris and the SNP.
“However, the reality is the company has not had a consistent pipeline of work because the SNP has been selling out Scottish workers by buying too many buses from abroad.
“Greater Manchester bought more than five times as many buses from Alexander Dennis in Falkirk than the entire Scottish government scheme to date. That is an astonishing industrial failure from the SNP.
“John Swinney should feel a burning sense of shame that Andy Burnham did more to support this Scottish company than the SNP government, it is an absolute failure to this community and to Scottish industry.
“No doubt Mr Swinney will have some sort of excuse as to why Manchester could do what his Scottish government could not. No one will believe it. Least of all the workers and communities who have been badly let down again.
“Scottish Government must re-double their efforts to keep Falkirk’s bus manufacturing sector going.”
Reacting to the news, ALBA Party Leader Kenny MacAskill said: “The loss of 400 skilled jobs is unacceptable and the impact on the town of Falkirk and surrounding communities would be devastating especially coming hard on the heels of Grangemouth closing.
"It is perverse when Scotland is awash with renewable energy and is the base for the UK’s green hydrogen that a company specialising in Hydrogen buses is forced to relocate elsewhere.
“We need an industrial strategy focused on retaining skilled manufacturing at home. The Scottish and UK governments and their agencies along with Falkirk Council must act urgently and leave no stone unturned in order to save these jobs and secure a viable and long term future for Alexander Dennis."
GMB Scotland said Alexander Dennis and ministers must redouble efforts to secure the company’s future in Falkirk.
The union, which represents workers at the plant, said every possible effort must be made to avert the threatened loss of 400 jobs.
Robert Deavy, GMB Scotland senior organiser in engineering and manufacturing, said: “This is a hammer blow for communities already reeling from the closure of Grangemouth.
“Like then, we are already hearing the same warm words from ministers about how they have tried but failed to secure workers’ jobs.
“If they have tried, they must try again and try harder.
“If the company is reviewing future operations, it must do so with an open mind and a determination to save jobs not shed them.
“We will do everything in our power to secure the future of Alexander Dennis in Falkirk and so must the company and so must ministers.”
Mr Deavy wrote to the company last month offering the union’s help to win new contracts.
In his reply, managing director Paul Davies said the company had been seeking support from UK and Scottish governments but progress had been slow and said the company was keen “to explore ways we can work together.”
Mr Deavy said: “There was nothing in that letter to suggest this announcement was imminent.
“If Mr Davies is serious about working together then that work must start immediately and with the single priority of saving this plant.”
Unite the union reacted with anger to the announcement.
Sharon Graham Unite general secretary said: “The announcement by Alexander Dennis to close its operations at Falkirk and Larbert is devastating. It is the latest huge economic blow to hit local communities on the back of the Grangemouth oil refinery closing.
“Hundreds of highly-skilled jobs are being lost and government ministers are guilty of sitting idly by while people and communities are being ripped apart. They will not be forgiven for their inaction and silence.”
Derek Thomson, Unite Scottish Secretary added: “We are absolutely sick to our stomachs. Workers building the greener buses of the future now have their livelihoods at risk. This will rock the local area which is already reeling from the Grangemouth oil refinery closure.”
“Scotland is on the brink of having zero green manufacturing capacity to speak of. How on earth will we be able to achieve any of our climate targets if we don’t retain the workers, knowledge and skills needed to deliver this future. Government ministers in Holyrood and Westminster are allowing our nation to be stripped bare of any meaningful industrial base.
"Unite will be fighting day in and day out to do everything we can to reverse this senseless decision by Alexander Dennis.”
