Graeme OgstonTayside and Central reporter
PA Media
John Swinney made the announcement at the company’s Larbert site
Bus manufacturer Alexander Dennis says it will keep its Scottish sites open after the Scottish government pledged £4m towards a furlough scheme.
The company had previously set out plans to close its facilities in Falkirk and Larbert, with the loss of 400 jobs, and move production to Yorkshire.
First Minister John Swinney confirmed the support, which will need “evidence of sufficient orders to sustain its operations in Scotland” by the company.
The furlough scheme will run for 26 weeks to enable Alexander Dennis to bring manufacturing back online.
The Scottish government will fund 80% of the scheme with Alexander Dennis providing the remainder.
The furlough scheme – the first of its kind to receive Scottish government backing – will kick in when the firm signs a new order and will support staff between the signing of a deal and the beginning of work.
Alexander Dennis
Union members voted last week to back the furlough scheme
On a visit to the bus company’s site in Larbert, the first minister said: “The Scottish government wants to retain the manufacturing workforce of Alexander Dennis.
“My officials have discussed detailed terms with management and reached agreement on the principles of a company run furlough scheme.
“This is intended to act as a bridge to a sustainable future for the company in Scotland.
“During this period, training will also be offered by Scottish Enterprise.”
Alexander Dennis said it had seen increased demand for its single and double-deck buses in recent weeks.
It said it was “confident in the placement of further orders to support Scottish manufacturing,” but details remained commercially sensitive.
The company’s managing director Paul Davies said the announcement marked “a turning point” which would save “hundreds of jobs”.
Alexander Dennis
The company had planned to close its Scottish facilitues
He said: “Together with our team members’ acceptance of new terms and conditions through the trade union ballot, and the confidence we have in securing new orders, we will be able to keep our manufacturing sites in Larbert and Falkirk open and operational.”
The company said in June that it still needed to find orders for at least 300 buses a year to safeguard production in Falkirk over the long term.
Under its original plans, Alexander Dennis had said it would consolidate its operations at a single location in Scarborough.
The firm blamed increased competition from electric bus manufacturers in China for the decision, saying Chinese firms now have about 35% of the UK market.
The furlough scheme will be managed by Alexander Dennis with financial support from Scottish government.
The company said that 11 roles not directly linked to Scottish manufacturing remained at risk of redundancy.
A vote among members of the Unite union last week returned an 85% result in favour of the new furlough scheme.
The union said that the next “immediate priority” was to secure new bus orders for the company to get the sites back up to full capacity.
Unite general secretary Sharon Graham said the union had “worked tirelessly” with its members, Alexander Dennis and the Scottish government to develop a rescue package.
She said: “The announcement by the first minister that the Scottish government will support a company run furlough scheme backed up with public funds is a very positive development, and one we fully support.”
Scottish Secretary Douglas Alexander also welcomed the company’s decision.
He said: “This will be relief to the talented workforce.
“The UK government has been leading intensive work with partners, including the Scottish government, and actively encouraged the furlough scheme that has been announced today.”