Alexander Dennis, a subsidiary of NFI Group Inc., a leader in bus and coach mobility solutions, today announced that it has responded to a Ministerial Statement regarding the Scottish Government’s furlough support scheme, as the statement does not fully reflect the circumstances that led to changes at the Company’s Scottish manufacturing operations.
In June 2025, Alexander Dennis announced plans to cease bus manufacturing operations at its Falkirk and Larbert facilities in Scotland, in response to falling demand and intense international competition.
Following the Scottish Government’s announcement of an additional £40 million of ScotZEB2 funding, which the company expected would deliver a significant volume of new bus orders, Alexander Dennis agreed to a 26-week furlough scheme designed to support employees’ wages until those expected orders entered production in 2026.
However, the additional ScotZEB2 funding extension was cancelled by Scottish ministers and was replaced by a new funding competition, ScotZEB3. This materially changed the expected order pipeline on which the original furlough scheme had been based.
As it became increasingly clear that the expected order volumes from this new ScotZEB3 process would be lower than previously anticipated, Alexander Dennis began considering options to maintain viable bus production in Scotland, including the in-sourcing of chassis production. This new approach was outlined to the Deputy First Minister in March 2026.
When the ScotZEB3 outcome was announced in March 2026, more than half of the buses were awarded to overseas manufacturers, thus reinforcing the company’s proposed course of action. To date, Alexander Dennis has yet to receive any new bus orders from ScotZEB3.
Alexander Dennis subsequently launched a consultation on proposals to move to chassis assembly as the only commercially viable option for its Scottish manufacturing operations. Since then, the company has invested millions of pounds transforming Larbert, on top of the significant investments made at the site in 2023. This investment was made to safeguard skilled jobs and protect substantial manufacturing capability in Scotland.
The actions taken by Alexander Dennis demonstrate that the company was focused on the long-term viability of its Scottish operations and any inference that there was a pre-determined plan to close operations is totally incorrect.
The costs borne by the company to protect jobs and skills significantly exceed the £4.1 million of furlough support originally on offer. These costs would not have been incurred had the anticipated Scottish Government-backed bus orders materialised and the factory had resumed bus body manufacturing, as the furlough scheme originally intended.
The company is calling on both the Scottish and UK governments to create a long-term pipeline of bus orders that supports domestic manufacturing, skilled jobs and economic growth. Achieving this will require partnership across the industry, supported by government policy, providing the long-term visibility manufacturers need to invest. With sufficient demand, Alexander Dennis remains ready and able to grow back its Scottish manufacturing operation.
Paul Davies, President & Managing Director at Alexander Dennis said:
“The suggestion that the furlough scheme failed because Alexander Dennis did not meet the agreed conditions tells only part of the story.
“In summer 2025, the Scottish Government announced additional ScotZEB funding that was expected to generate hundreds of bus orders for Alexander Dennis and safeguard manufacturing jobs in Scotland. It was on that basis that we reversed plans to close our Falkirk and Larbert factories, with expectations that the furlough payments would cover 80% of affected staff wages until new bus orders materialised.
“Any fair assessment of the situation will recognise that the withdrawal of the additional ScotZEB2 funding created an orderbook shortfall that ultimately led to our move to adapt Larbert to a chassis manufacturing facility.”
Mr Davies added:
“Alexander Dennis has invested millions of pounds of its own capital to safeguard jobs and manufacturing capability in Scotland. We are currently producing high-quality bus chassis in a state-of-the-art facility that we are all proud of and we have deliberately retained the ability to return to full bus body manufacturing if future demand supports it.
“Today, Scotland’s only domestic bus manufacturer has spare capacity while Scottish taxpayers’ money continues to subsidise buses built overseas.
“If the UK and Scottish governments create a stable, long-term pipeline of orders for domestically built zero-emission buses, Alexander Dennis is ready to invest, grow and reinstate bus body manufacturing in the region.”
