Alexander Dennis Limited has today announced that it has begun the formal consultation on its
previously announced restructuring programme in response to the significant fall in demand for new buses and coaches in the United Kingdom as a result of the coronavirus pandemic.
The UK”s biggest bus builder, which was
acquired Canada-based NFI Group Inc last year, says that the dramatic fall in demand for new buses and coaches as a result of lockdown, social distancing and low passenger numbers has left it with no alternative but to adjust its business to the current economic situation.
Since the announcement on July 27 of a restructuring programme that puts up to 650 jobs at risk across all of the company’s UK facilities, ADL has continued its dialogue with the UK and Scottish Governments and other stakeholders.
Appearing before the House of Commons Transport Select Committee in June, transport secretary Grant Shapps suggested that
the step-change in government funding for buses announced earlier this year could be used to acquire 4,000 new buses.
“The £5bn that was announced for cycling, walking AND buses, there’s £3bn of that that we have yet to allocate … there’s £3bn of investment in buses yet to come,” he told MPs. “I think we think we’ll be able to buy something like 4,000 new buses as part of that investment, and do many other things.”
There is still no immediate visibility of the stimulus funding urgently required to support operators to place orders, making it necessary to begin its formal consultation on the proposed changes
However, today’s statement from ADL said: “There is still no immediate visibility of the stimulus funding urgently required to support operators to place orders, making it necessary to begin its formal consultation on the proposed changes.”
In a statement issued today, ADL said that it remained firmly committed to working with its customers and supporting the bus and coach operating industry, which is battling an unprecedented crisis. The restructuring programme is designed to adjust current capacity without compromising the company’s ability to respond to a resurgence of demand in the future.
Following experience of vertical integration at ADL’s facilities in North America and the Asia Pacific region, where building chassis and body on the same site has demonstrated efficiencies in terms of output, time, cost and co-ordination, ADL intends to transfer chassis production to its Falkirk factory. This will impact around 200 employees in manufacturing and operational support roles at Guildford.
Non-manufacturing functions including Engineering, Test & Development and Aftermarket will continue to be based at the Guildford site.
“The Dennis brand is of huge significance to the company, with its proud history and heritage of automotive innovation dating back to its inception in 1895,” said Paul Davies, ADL president and managing director. “We will fight hard to protect this legacy and will continue to invest in our chassis product range, which will continue to be engineered in Guildford.”
The current lack of demand for new buses and coaches will also mean the potential loss of 90 production jobs in Scarborough and a net reduction of 160 manufacturing roles in Falkirk, even with chassis assembly transferred to that site.
As the company adjusts its overhead to the change in manufacturing activity, a further 200 roles will be affected in support functions across all UK sites. ADL is actively seeking voluntary redundancies to reduce the number of compulsory job losses.
We remain confident that the situation will improve in time, and we are well placed to take advantage when that happens
Davies commented: “We have no choice but to implement these tough decisions to protect the company’s future health. We remain confident that the situation will improve in time, and we are well placed to take advantage when that happens, but right now we have to adjust to our new economic reality.
“We continue to call upon the UK and Scottish Governments to urgently introduce meaningful support to facilitate demand for new buses and coaches, not only to prevent further damage to UK bus and coach manufacturing that could threaten additional production sites, but to help build back better with a green recovery that delivers cleaner air for our towns and cities.
“The installed UK fleet is currently approximately 50,000 buses and 21,000 coaches with an average age of nearly 11 years. Further, only 0.1% of the total fleet are electric, which provides opportunity for massive reduction of the environmental footprint.”
www.alexander-dennis.com
