Alexander Dennis closure ‘not done deal’ but orders and change needed, MSPs told

The closure of Alexander Dennis sites in Scotland is “not a done deal”, the company has told MSPs, but orders for up to 100 buses and changes to regulation are needed before the end of the year.

The bus firm announced the start of a consultation process which would see the consolidation of its manufacturing business at a single site in Scarborough, North Yorkshire, shutting its Falkirk plant and ceasing production at the nearby Larbert factory, with 400 jobs at risk.

But appearing before the Economy and Fair Work Committee on Thursday, the firm’s boss said the closure was not a foregone conclusion.

“It’s absolutely not a done deal, it is a consultation process,” said president and managing director Paul Davies.

“We’re very grateful for the active engagement we’ve had from both governments, from other political parties and stakeholders – we’re absolutely committed to keeping those conversations going, along with this committee too.

“But there are, for us, other implications around the long-term, the runway, is the market dynamic going to change?

“Our assumptions are, if they don’t change, we have to take action to look after the company.”

But Mr Davies told the committee the firm would need to see consistent orders made to help stabilise the future of the business in Scotland.

Asked how many orders the firm would need this year, he said it would be around 70 to 100 buses by the end of the year and 300 to 400 for next year.

But even if the orders come, there will be a lag before work can begin on manufacturing to allow for design and the acquisition of materials.

There have been calls for a furlough scheme to be put in place, with the Government being urged to step in and pay workers until building can begin.

At a meeting of the committee on Wednesday, trade union bosses estimated such a scheme would cost between £4 million and £5 million.

If the number of orders required to save the jobs were received by the firm, committee convener Colin Smyth asked if the company would ensure they were fulfilled in Scotland rather than in Scarborough.

“It would speak to the further points on how we bridge the gap between the gap in our order book which is coming in the summer to us being able to build bodies in Scotland in, say, Q3 in the autumn,” he said.

“Hence the conversation around how do we bridge that gap to the point where we have no work in the summer, for any new work coming in.”

But Mr Davies stressed that for the move to be avoided altogether, there would have to be a shift in the UK market on bus manufacturing that could ensure the company could stay in the Forth Valley.

“It’s a broader conversation, rather than just saying that an order will stop the consultation process,” he said.

Mr Davies added: “From our perspective, there’s wider issues.

“Obviously there’s conversation around a potential furlough scheme, but that for us is really part of a wider issue around ongoing demand and the issue of reform and the Subsidy Control Act conversations that have been around for some time.”

The Subsidy Control Act governs how much state intervention there can be in private business, with many believing a relaxation of the legislation would allow Government to step in and help industries which are struggling, through arrangements like direct awards of contracts.