Bus manufacturer Alexander Dennis is set to close its Scottish operation with the loss of up to 400 jobs.
The firm has entered into a consultation on a new strategy for its UK operations which would see Scarborough in north Yorkshire become the sole manufacturing site.
The move would see its Scottish base at Falkirk shut down, with production lines at Larbert suspended upon completion of current contracts.
The company said the actions were “regrettable” but necessary to lower overall costs, deliver clearer responsibilities and increase efficiency by removing duplicate functions and activities.
The statutory consultation places up to 400 roles at potential risk of redundancy, representing approximately 22% of Alexander Dennis’ workforce.
The company expects a follow-on impact in its domestic supply chain, where it has spent over £1bn in the last five years with its 1,000 suppliers in all parts of the UK. For every job in bus manufacturing, there is a multiplier of three to four jobs in the wider supply chain and support services.
Paul Davies, Alexander Dennis president and 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.
“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.”
He added: “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.”
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.”
However, Labour accused the SNP government of “selling out” the Falkirk workforce by placing orders with rival manufacturers.
Most of the Scottish Zero Emission Bus Challenge Fund’s buses were procured from outside of Scotland, with Alexander Dennis building 44 buses out of a potential total of 252.
Alexander Dennis received more orders from greater Manchester than the Scottish governments scheme, with Falkirk Workers building 254 buses for the Bee Network.
Scottish Labour MP for Falkirk, Euan Stainbank, said: “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.”
Scottish Conservative Central Scotland MSP Graham Simpson also noted the failure to place orders locally.
“Our bus market is being taken over by low-cost Chinese imports and we need to see action to end this scandal immediately,” he said.
Scottish Liberal Democrat economy spokesperson Jamie Greene MSP added: “It’s pretty damning that a firm with such strong Scottish roots is considering shifting production to Yorkshire. The wheels are coming off the SNP’s economic strategy.
“This will be a very tough day for the local workforce. It will be made worse knowing that most of the buses purchased by the Scottish Government as part of their Zero Emission Bus Challenge were procured from outside of Scotland, despite local manufacturers crying out for new businesses.
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