Alexander Dennis, a subsidiary of NFI Group Inc., one of the world’s leading independent global bus manufacturers, confirmed today that it has started a consultation process regarding 160 roles at potential risk of redundancy in Scotland as government zero-emission bus funding has disproportionately benefitted competitors from lower-cost and lower-security economies.
The manufacturer has been forced to make this decision despite record levels of funding for zero emission buses being made available from both the UK Government and the Scottish Government. Alexander Dennis has repeatedly voiced concerns about the uneven playing field that exists for UK bus manufacturers.
Alexander Dennis currently employs nearly 1,950 people in highly skilled jobs and apprenticeships in the UK, alongside an estimated 6,350 further people in its domestic supply chain. With the active support of its parent NFI Group since 2019, Alexander Dennis has continued to invest in its facilities in eight locations across the UK, ensuring value is retained in the economy and benefitting local communities.
The company’s investment in people, products and facilities, as well as those made by other UK manufacturers to strengthen the domestic manufacturing base are currently not honoured by government policies that would reward the higher wages paid and better employment rights offered in the UK. Companies have been put at a disadvantage by policies that actively underpin and encourage an uneven playing field working against British bus manufacturers.
Import duties are often used to incentivise investment in domestic products and jobs, ensuring they are not undercut by lower-paying and lower-security roles elsewhere, yet the 10% tariff applied to electric buses is even lower than the 16% rate for equivalent diesel vehicles. While many countries increasingly employ trade remedy measures to promote domestic manufacturing industries, there is yet to be any such action in the UK.
Despite various stated political ambitions to support local businesses, supply chains and communities, authorities are prevented from considering such wider benefits due to the subsidy control legal framework, underpinned by the Subsidy Control Act 2022. This sets out requirements and prohibitions which include an inability to grant subsidy that gives any additional consideration or weighting to domestic manufacturers over any non-domestic provider.
In Scotland, UK-based vehicle manufacturers are at an additional disadvantage when in direct or indirect receipt of Scottish Government funding as they must adhere to advanced Fair Work First standards of employee remuneration, welfare and safety, while no such requirement is made of suppliers whose production takes place in other countries. Neither are bus operators incentivised or rewarded for choosing companies that meet Fair Work First standards when funding is awarded. This not only puts domestic manufacturers at further competitive disadvantage, but also undermines the value of this flagship policy as government-funded work is shipped offshore.
As a result of the combined effects of these policies on the UK bus market, Alexander Dennis must consider options to match production capacity with its order book, particularly in its Scottish manufacturing facilities. A statutory consultation has been launched with 160 roles in Scotland at potential risk of redundancy.
Paul Davies, President & Managing Director for Alexander Dennis, commented: “We are proud to be headquartered in the UK with much of our workforce based here, and our combined companies have over 300 years of manufacturing history, providing highly skilled engineering and manufacturing jobs and apprenticeships that support our communities.
“We are deeply disappointed that the ongoing effect of various government policies is now threatening some of these jobs. Competition in itself is healthy, but when taxpayer money is spent with little domestic industrial, economic or employment benefit and bus companies effectively are incentivised to buy from lower-security economies, it creates an incomprehensible dynamic and an uneven playing field.
“While our statutory consultation has commenced, we will continue to do everything we can to save and protect as many jobs as possible. We will continue our dialogue with governments to identify potential solutions to level the playing field, strengthen our industry and drive investments in local jobs and domestic supply.”