Politics overshadow pain of cuts at Alexander Dennis

The Herald Scotland

18 hours ago

This is all the more so when it comes to manufacturing job losses in Scotland, perhaps because of the extent to which this sector has dwindled over the decades.
The news that up to 400 jobs are at risk at Falkirk bus manufacturing firm Alexander Dennis is first and foremost a massive blow to the people directly affected. It means there is a very real prospect of hundreds more people joining the ranks of the unemployed in an area hit hard by the closure of Scotland's only oil refinery at Grangemouth, with the loss of around 400 job losses.
It is always disheartening when concerns over widespread job cuts come a distant second in the minds of those seeking to score political points from corporate decisions taken to reduce workforces.
Yet, coming so soon after further job cuts were announced by oil and gas giant Harbour Energy in Aberdeen, a move blamed by the company on the UK Government's energy profits levy, the proposed cuts at Alexander Dennis have led to an impression of decline in Scottish industry.
Opponents of the Scottish Government have been quick to assert that events at Alexander Dennis are yet more evidence of the administration's flawed strategy and failure to protect industry and jobs. These critics repeatedly point to the delays and cost over-runs in the delivery by the nationalised Ferguson Marine shipyard of two ferries to serve the west coast and the time it has taken to find a buyer for Prestwick Airport, which was taken into state ownership in 2013, in justification of these claims (even though Prestwick is now regularly making profits and beginning to build a lucrative air freight operation). The Scottish Government has also come under for fire failing to deliver the amount of "green" jobs in the transition from oil and gas production to renewable energy that ministers forecast.
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But in the matter of Alexander Dennis, which has been part of NFI Group since the North American company acquired the firm for £320 million in 2019, any culpability on the part of the Scottish Government seems hard to discern. Winnipeg-based NFI, which is listed on the Toronto Stock Exchange, looks simply to have assessed its costs and concluded that it can save money by consolidating its UK bus body building operations into a single site. Unfortunately for Scotland, the site selected for this work is in Scarborough, not Falkirk.
Euan Stainbank, the Scottish Labour MP for Falkirk, said the Scottish Government should have done more to support Alexander Dennis by ordering more buses from domestic manufacturers to serve local networks. He said Greater Manchester had bought more than five times the amount of buses from Alexander Dennis than had been purchased to serve the industry in Scotland.
But ultimately in Scotland it is down to private bus companies to decide which manufacturers they wish to buy their vehicles from – not the Scottish Government.
Naturally, those fighting to prevent the proposed cuts in Falkirk are urging Scottish ministers to do all they can to stop or limit the amount of redundancies during the consultation period that is now under way. Perhaps there is some financial incentive that can be offered to entice NFI to change its mind, but it is hard to be optimistic. Paul Davies, president and managing director of Alexander Dennis, hinted at the limitations of UK policy when the proposed cuts were announced on Wednesday.
'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,' he said.
'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.'
There is a certain, painful irony to the situation too. While the Grangemouth refinery was declared by Petroineos to be no longer financially viable in the face of global competition and the drive to net zero, the Alexander Dennis site in Falkirk has been involved in the production of buses powered by electrical batteries and hydrogen, in other words at the cutting edge of modern transport technology. As veteran Scottish politician Kenny MacAskill, leader of the Alba Party, noted, 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'.
Sadly, past experience in Scotland suggests that once a company decides to close operations, there is no going back. Petroineos could not be persuaded to change course at Grangemouth, and back in 2009 Diageo proceeded to shut down its Johnnie Walker plant in Kilmarnock despite significant protests at the time.
It looks for all the world that the proposed cuts at Alexander Dennis are destined to become another sad chapter in Scottish industrial history, and one that will be especially poignant given the company's proud and long manufacturing legacy.