On September 15, 2025, the future of Scotland’s bus manufacturing sector took a dramatic turn as Alexander Dennis, the country’s largest bus maker, announced it would keep its facilities in Falkirk and Larbert open. This decision comes after months of uncertainty, job fears, and tense discussions, all culminating in a £4 million lifeline from the Scottish government to fund a unique furlough scheme. The move not only averts the immediate loss of 400 jobs but also signals a renewed commitment to domestic manufacturing in the face of fierce global competition.
The story began earlier this year when Alexander Dennis unveiled plans to shutter its Scottish sites and shift production to Yorkshire, citing mounting pressure from Chinese electric bus manufacturers, who now command a staggering 35% of the UK market. The company argued that this influx of competition had made it increasingly difficult to maintain operations in Scotland. The prospect of losing hundreds of skilled jobs sent shockwaves through local communities and the broader UK manufacturing sector.
But hope was not lost. As reported by BBC and other outlets, intensive negotiations kicked off between the company, trade unions, and both the Scottish and UK governments. The goal: to find a way to keep the sites open and safeguard the livelihoods of hundreds of workers. The result is a novel furlough scheme—the first of its kind to receive Scottish government backing—designed to bridge the gap between securing new orders and resuming full-scale production.
Under the terms of the scheme, which will run for 26 weeks, the Scottish government will provide 80% of the funding, with Alexander Dennis covering the remaining 20%. The furlough program is set to activate whenever the company signs a new order, supporting staff during the critical period between the signing of a deal and the start of manufacturing work. During this downtime, Scottish Enterprise will offer training to help workers upskill and prepare for the industry’s green transition.
First Minister John Swinney visited the Larbert site to confirm the government’s support and explain the rationale behind the intervention. "The Scottish government wants to retain the manufacturing workforce of Alexander Dennis," Swinney said, emphasizing the importance of protecting skilled jobs as Scotland moves toward a greener industrial economy. He added, "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."
For Alexander Dennis, the announcement marks a crucial turning point. According to Managing Director Paul Davies, "Today’s announcement marks a turning point. The Scottish Government’s support allows us to propose a new outcome to our statutory consultation today. 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. This decision saves hundreds of jobs within Alexander Dennis and supports our 1,000 suppliers throughout the UK."
Davies also acknowledged the collaborative nature of the rescue package, noting the "determination and shared belief in the value and future of domestic manufacturing, which is a critical driver of Scotland’s economy." While the company has experienced increased demand for its single and double-deck buses in recent weeks, it must still secure orders for at least 300 buses per year to guarantee long-term production in Falkirk. Details of these potential orders remain commercially sensitive, but optimism is running high within the company’s leadership.
The announcement has been met with widespread relief among workers and their representatives. Last week, members of the Unite union voted overwhelmingly—by an 85% margin—in favor of the new furlough scheme. Unite general secretary Sharon Graham was quick to praise the outcome, stating, "Unite has worked tirelessly for months with our members, Alexander Dennis and the Scottish government to develop a rescue package. 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." Graham added, "The immediate priority is now to secure new orders for Alexander Dennis which will protect hundreds of highly skilled jobs for years to come."
Scottish Secretary Douglas Alexander also welcomed the decision, highlighting the UK government’s role in facilitating the agreement. "I warmly welcome Alexander Dennis’s decision which will see the company’s Falkirk and Larbert sites remain open and operational. 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. Future orders are key to the long-term success of companies like Alexander Dennis. Alongside Mayors who have delivered thousands of orders, we will continue to do all we can to support our domestic bus manufacturers."
Despite the positive news, challenges remain. Eleven roles not directly linked to Scottish manufacturing are still at risk of redundancy as the company continues to review its business structure in a bid to improve its competitive position. The company’s original plan to consolidate operations in Scarborough is now on hold, but the pressure to adapt to a rapidly changing market—driven by technological shifts and international competition—remains intense.
Industry observers point to the broader significance of the deal. Not only does it preserve a vital part of Scotland’s industrial heritage, but it also demonstrates how targeted government intervention, union cooperation, and management flexibility can combine to protect jobs and support the transition to a green economy. The furlough scheme, in particular, is being watched closely as a potential model for other sectors facing similar upheaval.
For now, the focus shifts to securing those all-important new orders. The union, company, and government are united in their message: the survival of Scotland’s bus manufacturing industry depends on winning enough contracts to keep the production lines moving. As the coming months unfold, all eyes will be on Alexander Dennis to see if this bold rescue plan can deliver on its promise—and provide a lasting foundation for jobs, skills, and innovation in Scotland.
The events of September 15, 2025, will be remembered as a day when collaboration, determination, and a bit of government ingenuity kept the wheels of Scottish manufacturing turning.
